Comment Text:
I am the grain department manager of a large farmer cooperative in Missouri. We are opposed to the proposal from the CME to increase the daily price limits for yellow corn futures from $.30 per bushel to $.50 per bushel.
We will hedge approximately 30 million bushels of corn this year using the CME corn contracts. Increasing the daily price limits will create increased volatility for all users and will place additional margin call exposure on open positions for all participants. As the commodity markets have experienced much heavier participation from the investment community, all commodity futures have see a tremendous increase in price volatility and the resulting demand for ever increasing lines of credit and capital and this places a greater hardship on operating lines of credit.
Daily price limits are there for a sound reason and expanding them will only contribute to greater price volatility and greater margin calls.
