The Chicago Mercantile Exchange (CME) Group plans to decrease daily limits for live and feeder cattle futures contracts, pending approval by the Commodity Futures Trading Commission.
ShayLe Stewart, DTN livestock analyst, reported she received an email from CME detailing the proposed changes, which will go in effect Oct. 25 if approved.
The new trading limits for live cattle contracts would decrease from a daily limit of $7.50 and an expanded limit of $11.25 to a daily limit of $6.50 and an expanded limit of $9.75. The proposed limits for futures cattle contracts would decrease from a daily limit of $9.25 and an expanded limit of $13.75 to a daily limit of $8.25 and an expanded limit of $12.25.
“I personally believe that reducing the daily limits from an expansion of 4.25% to 3.5% is a positive thing for cattlemen; theoretically, it should help curb some of the volatile market swings that happen in the cattle complex for no apparent reason,” Stewart said.
