The CME Group announced it is once again expanding its daily price limits for live and feeder cattle contracts.
Changes took effect on June 3. CME annually adjusts daily price limits based on the June live cattle contract’s performance over the 45 consecutive trading days preceding the last trading day of the nearest April contract.
The live cattle current initial limit is $6.75/cwt, and the new initial limit will increase to $7.50/cwt and expand to $11.25/cwt. The feeder cattle current initial limit is $8.25/cwt, and the new initial limit will increase to $9.25/cwt and expand to $13.75/cwt.
The National Cattlemen’s Beef Association (NCBA) said it opposes formula-based variable price limits, and that the new limits raise concerns about margin calls and the potential for large, single-day moves.
“NCBA has raised concerns with CME officials and will continue working with CME to find solutions amenable to both the buy and sell sides,” the group said in an e-newsletter.
