CME Group, KCBT and MGEX Announce Price Limit Expansion for Wheat Futures

CHICAGO, KANSAS CITY, Mo., and MINNEAPOLIS, Feb. 8 /PRNewswire-FirstCall/ -- CME Group, the Kansas City Board of Trade and the Minneapolis Grain Exchange announced today that all three exchanges will implement new price limits for Wheat futures and mini-sized Wheat futures on Sunday, February 10 for trade date Monday, February 11.

Price limits will be set at $0.60 per bushel above or below the previous day's settlement price. Should two or more wheat futures contract months within a crop year (or the remaining contract month in a crop year) close at limit bid or limit offer, the daily price limits for all contract months on the respective exchange shall increase by 50 percent the next business day and an additional 50 percent each subsequent day two or more contract months within a crop year (or the remaining contract month in a crop year) close at limit bid or limit offer. Daily price limits shall revert back to $0.60 after no wheat futures contract month closes limit bid or limit offer for three consecutive business days. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month, except in Minneapolis where there are no price limits in the spot month on the first business day following options expiration.

The joint expansion of price limits is considered necessary due to the unprecedented price levels and volatility in recent market sessions and over the past year. Wheat futures on all three exchanges have closed at a limit move for successive sessions, and expanded limits will allow Wheat contracts to continue performing their price discovery and risk mitigation functions without being unduly constrained by limit price moves.

By acting in unison, the exchanges will help customers avoid additional risk resulting from distorted inter-market spread relationships that exist among the wheat markets when price limits are not consistent.