CMC Calls On CFTC To Raise Spec Position Limits
Advancing our mission to advocate for open, competitive markets, CMC expressed its strong support for the CFTC proposal to revise the speculative position limits for some agricultural commodities in comments filed this week. "This proposal will encourage broader participation in our markets, which attracts more volume and more liquidity," said CMC. Increased volume and liquidity, CMC reasoned, "tends to reduce bid/ask spreads and build depth of order book in every market."
CMC acknowledged that price volatility has increased, but maintained that speculative activity by itself has not "influenced any price trends of significant magnitude or duration." Instead, CMC reasoned that the record-high prices have developed because of "worldwide demand trends, weather, and other factors such as currency fluctuations and economic development." In addition, the "large money flows from ‘buy-only' financial hedgers" CMC explained, "have contributed to volatility and upward price pressure."
CMC also voiced its support for the Commission's proposal to maintain parity with respect to the MGX, KCBT, and CBT Wheat contracts and called on the CFTC to grant each exchange authority to set its speculative position limits, subject to Commission oversight.