CME Group Corn

From MarketsWiki
Jump to: navigation, search
Not impressed? Tell us how to improve it or sign up to edit.
CmeLogo NoTag.jpg

CME Group corn futures and options trade both by open outcry and by electronic trading. During what are called "regular trading hours" (RTH), corn futures trade side-by-side on Globex and on the trading floor, while options trade only on the trading floor. During electronic trading hours (ETH), both corn futures and options are traded.

CME Group corn futures and options migrated from the eCBOT trading platform to CME Globex on the evening of Jan. 13, 2008.

On Aug. 10, 2011, it was announced that, starting Aug. 22 of 2011, corn would be allowed to rise or fall by 40 cents per bushel in daily trading, an increase over the previous 30-cent-limit and a response to a year of volatile, market limit trading days for corn. Permission was received from the Commodities Futures Trading Commission (CFTC) to increase the limits.[1] The change would mark the first expansion in the daily trading limit for corn in 3-1/2 years. The exchange widened the limit to 30 cents, from 20 cents, in March 2008.[2] CME's proposal to change the limits had run into stiff opposition from farmers, grain elevators and food companies, that said the increase was unnecessary. They complained the larger limit would increase volatility in the corn market and expose hedgers to bigger margin calls if prices would surge. CME tweaked the proposal in response to initial objections. It originally proposed to increase the daily limit to 50 cents.[3]


Commitment of Traders

The CFTC regularly issues Commitments of Traders reports that show the distribution of open positions among different classes of traders. Information about corn positions is available in this report.[4]

Uses

Corn's greatest use is feed for livestock and poultry. Corn is also used in many everyday food for humans, including corn oil for margarine, cornstarch for gravy and corn sweeteners for soft drinks. Additionally, corn is increasingly used in the production of ethanol. Other non-food uses of corn include in absorbing agents for disposable diapers and adhesives for paper products.[5]

Contract Specifications

Corn futures
Exchange CME Group
Settlement Physically delivered
Contract Size 5,000 bushels (deliverable grades: No. 2 Yellow at par, No. 1 yellow at 1-1/2 cents per bushel over contract price, No. 3 yellow at 1-1/2 cents per bushel under contract price)
Pricing Unit Cents per bushel
Tick Value 1/4 cent per bushel ($12.50/contract)
Contract Months Mar, May, Jul, Sep, Dec
Last Trading Day The business day prior to the 15th calendar day of the contract month.
  Open Outcry Electronic
Trading Hours Monday – Friday, 8:30 a.m. – 1:15 p.m. Central Time 6:00 p.m. - 6:00 a.m. and 9:30 a.m. - 1:15 p.m. Central Time, Sun.-Fri. Trading in expiring contracts closes at noon on the last trading day.
Ticker Symbol C ZC
Price Limits $0.40 per bushel expandable to $0.60 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month. Twenty cents ($0.40) per bushel above or below the previous day's settlement price
 
Corn options
Trade Unit One futures contract
Point Value Need point value!
Tick Value 1/8 cent per bushel ($6.25/contract)
Option Months March, May, July, September,December; a monthly (serial) option contract is listed when the front month is not a standard option contract. The monthly option contract exercises into the nearby futures contract. For example, an August option exercise into a September futures position.
Strike Prices 5 cents/bushel for the first two months and 10 cents/bushel for all other months. At the commencement of trading, list 5 strikes above and 5 strikes below the at-the-money.
Exercise Style American exercise: The buyer of a futures option may exercise the option on any business day prior to expiration by giving notice to the CME Group clearing house by 6:00 p.m. Chicago time. Option exercise results in an underlying futures market position. Options in-the-money on the last day of trading are automatically exercised.
Option Expiration Day Need OED rules!
  Open Outcry Electronic
Trading Hours Monday – Friday, 8:30 a.m. – 1:15 p.m. Central Time Sunday – Friday, 7:00 p.m. – 7:45 a.m. Central Time and Monday – Friday, 8:30 a.m. – 1:15 p.m. Central Time
Ticker Symbol N/A OZC
Price Limits $0.40 per bushel expandable to $0.60 when the market closes at limit bid or limit offer. There shall be no price limits on the last trading day. $0.40 per bushel expandable to $0.60 when the market closes at limit bid or limit offer. There shall be no price limits on the last trading day.

Notes

Also See

CME Group commodity products

Corn futures Specification

References

  1. Corn Trading Limits Increased. Des Moines Register.
  2. CBOT Corn Trading Limit To Expand, More Volatility Seen. Reuters.
  3. CFTC Approves CME Plan To Raise Daily Corn Trading Limit. Nasdaq.
  4. Commitments of Traders. Commodity Futures Trading Commission.
  5. CBOT Agricultural Products. Chicago Board of Trade.