Daily Trading Limits

[The Bear 10]

I've been trying to find out the lock limit information on some CBOT contracts - namely SOYBEAN MEAL. Here's what I found on CORN

 

Daily Price Limit

Twenty cent ($0.20) per bushel ($1,000/contract) above or below the previous day's settlement price. No limit in the spot month (limits are lifted beginning on First Position Day).

 

 

What doesn't make sense to me, is it says "No limit in the spot month", yet i've heard in the news of corn going limit down recently. How exactly do I find out what contracts lock and which ones don't. (Note that I only trade the front month contracts)

[torero 10]

Wheat just had a limit up day today.

[Guest cooter]

Bear,

I was just looking at this today. Here's the link for Soybean Meal:

 

CBOT - Soybean Meal Quotes Open Auction

 

Unlike the Corn, Wheat and Soybean contracts that are similar in tick size/point to the e-mini S&P contract (ES), this one is similar to the e-mini Russell (ER2) instead.

 

Tick Size 10 cents/ton ($10/contract)

 

Each tick is worth $10 per contract (just like the Russell), and each full point (or dollar, in this case) is worth $100/contract.

 

And the limit is:

 

Daily Price Limit $20/short ton ($2,000/contract) above or below the previous day's settlement price. No limit in the spot month (limits are lifted beginning on First Position Day).

 

A limit move here is $20 in either direction (up or down) from the last trading day's closing (settle) price.

 

First Position Day in the Spot (or current) month for the Meal is 4/27/07, which is Friday, for the May 07 contract (SMK07), when the limits will be lifted on this contract. Note that most of the activity has already shifted (since last week) to the July 07 (SMN07) contract.

 

You can find more info about these dates on the CBOT Product Notice calendar here:

 

CBOT - Product Notice Calendar

 

Hope this helps.

[Guest cooter]

Wheat just had a limit up day today.

 

Yeah, wasn't it beautiful!!!

 

And, so did July Corn too.

 

Why fight for your points in the equity indices, when you can get some in the grains instead?

[notouch 10]

Not much fighting needed in the equity indices right now. The only way is up.

[Soultrader 12]

Not much fighting needed in the equity indices right now. The only way is up.

 

lol yes youre right. But the ag's is something I am looking into as well.

[The Bear 10]

Thanks guys but can you further clarify something. I've pulled more info off the CBOT site regarding the SOYBEAN MEAL contract:

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1008.01A Trading Limits The Crude Soybean Oil and Soybean Meal Committee has been asked to interpret the following sentence: "These provisions (trading limits) shall not apply to trading in the current month on or after the first notice day thereof." The question that arises is whether this means the first business day of the delivery month or the first notice day of the contract which would be the last business day of the previous month. The Committee is of the opinion that it is the intention of the Regulations that the meaning of the sentence includes the first notice day which is the last business day of the month preceding the delivery month. 36R (09/01/94)

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Cooter, see the sentence that reads (in your e-mail pulled from the Soybean Meal Contract Specifications): No limit in the spot month (limits are lifted beginning on First Position Day).

 

Does it actually mean, daily limits are in effect during the spot month before the First Position Day of that spot month?

 

When it just says "No limit in the spot month" - this is only covering the time between the First Position Day and the Last Trade Date right?

 

I find this a bit confusing. That same statement is present for pretty much all the ags on CBOT.

[Guest cooter]

 

Cooter, see the sentence that reads (in your e-mail pulled from the Soybean Meal Contract Specifications): No limit in the spot month (limits are lifted beginning on First Position Day).

 

Does it actually mean, daily limits are in effect during the spot month before the First Position Day of that spot month?

 

When it just says "No limit in the spot month" - this is only covering the time between the First Position Day and the Last Trade Date right?

 

I find this a bit confusing. That same statement is present for pretty much all the ags on CBOT.

 

Correct, Bear. It means just that.

 

The spot month is referring only to the expiring contract, May07 Meal (SMK07), in this instance. Starting on First Position Day, 4/27/2007, trading limits are lifted for this May contract only, effective to the Last Trade Date of 05/14/2007. Until then, regular trading limits apply.

[torero 10]

Looks like all the patterns on grains are broken to the upside (falling channel on wheat, triangle on corn), not sure about soybean meal though. I'm looking for confirmation for entry here.