The Chicago Board of Trade is making some changes to position limits.
Effective March 15th single-month contract position limits for corn will almost double up from 33,000 contracts to 57,800. For soybeans, the new limit will be 27,300, up from 15,000, and wheat is up from 12,000 to 19,300. Soy meal and soy oil will see limit increases as well.
Market Analyst Arlan Suderman with StoneX spoke with us about market implications: “What it means is, in the bottom line is you’ve got these big institutional investors with computers directing the trades, based on when momentum flips, that you can have bigger price swings. Farmers like that when it’s to the upside; end users like it when it’s to the downside, but the bad comes with the good.”
The changes allow institutional investors larger positions and commercial funds can have large enough hedge positions based on their customer size.