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Comment for Industry Filing IF 10-016

  • From: Greg Ogborn
    Organization(s):
    Sunny Delight Beverages Co

    Comment No: 47866
    Date: 7/19/2011

    Comment Text:

    I wish to make it known that as a commercial processor/hedger that I am firmly opposed to the proposal to increase the current 30 cent per bushel corn limit. From the 2008 crop year to-date (arguably the most volatile period in history), there has not been one single instance of futures being locked at limit for two consecutive trading sessions (see attached with limit moves highlighted). Between the initial 30 cent limit and the expanded limit to 45 cents (75 cents total) in the next trading session; the market has always cleared within 24 hours. If you evaluate the trading sessions you will often as not see that after a limit close; the next session actually closes in the opposite direction. I would speculate that the reason for the opposite following close is because the market was overdone due to computer traded hedge funds. This unnecessary proposal will only serve to increase volatility, increase margin requirements (and margin calls) and allow the computer traded hedge funds to exert even more influence in the markets. The 75 cent combined daily/expanded limit is greater than 10% of the market price and completely adequate. I don't know who this change might benefit but it most certainly is not commercial hedgers and consumers.