Country elevators and others that buy grain hedge their price risk by selling futures. When prices rally as short hedgers face higher margin calls. For large positions, the extra capital demands can run into the millions of dollars.
The number of corn contracts that settled at or above the initial price limit in 2011 were at 68 while only nine soybean contracts settled at limit and five wheat, according to CME data.
CME last raised corn limits to 30 cents from 20 cents in March 2008, during another period of extremely volatile price swings when corn soared to a then record high.
In 1946 the corn limit was 8 cents per bushel, expandable to 12 cents, in 1973 it was 10 cents expandable to 15 cents, in 1993 it was 12 cents expandable to 18 cents and in 2000 it was 20 cents per bushel and wasn't expandable.
In March 2008 the limit was 30 cents per bushel, expandable to 45 cents then expandable again to 70 cents.
Copyright 2011 Reuters.