February 20, 2008

Minneapolis Grain Exchange retains daily wheat limit

The Minneapolis Grain Exchange (MGE)'s daily trading limit for spring wheat futures Wednesday will remain US$1.35, the exchange said Tuesday (February 19, 2008).

The daily trading limit for Kansas City Board of Trade (KCBT) hard red winter wheat futures Tuesday dropped to 60 cents from 90 cents. The Chicago Board of Trade's daily limit for wheat also is 60 cents.

The three exchanges all increased their daily limits to 60 cents from 30 cents as of Feb. 11 and said they would increase limits by another 50 percent if at least two contract months within a crop year closed at limit bid or offer. That happened Feb. 12 at the MGE and KCBT, so the two exchanges increased their limits to 90 cents from 60 cents as of Feb. 13.

Two old-crop MGE contracts then ended limit up, 90 cents higher, on Feb. 14, prompting another increase in the MGE's daily limit as of Friday. Daily price limits revert back to 60 cents after no wheat futures contract month closes limit bid or limit offer for three consecutive business days, according to the exchanges. That means the MGE's daily limit will decrease to 60 cents as of Thursday if no two contracts within the same crop year close limit bid or limit offer Wednesday.