On Feb. 15, CME Exchange notified market users that, pending Commodity Futures Trading Commission approval, it will implement a reduction in the spot month limit from 300 to 200 contracts as of the close of trading on the business day immediately preceding the last two trading days of the contract month for the Live Cattle Futures contract. The initial spot month limit of 450 contracts shall continue to be in effect as of the close of trading on the first business day following the first Friday of the contract month and the second spot month limit of 300 contracts shall continue to be in effect as of the close of trading on the business day immediately preceding the last five trading days of the contract month. The single month limit of 6,300 futures contract equivalents remains unchanged.

On hearing the news, United States Cattlemen’s Association Marketing Committee Chairman Allan Sents had this to say.

“Over the course of the past year, USCA has worked closely with the CME to find real, workable solutions to price volatility in the marketplace. We are encouraged by recent actions taken to reduce spot month limits during the last few days of each contract month. This change reduces the possibility of a “squeeze” in the market and alleviates pressure points that could occur. USCA appreciates the ongoing conversations with CME leadership and looks forward to continuing the dialogue with CME to address the disconnect between the cash and futures market.”