Plans for 2020 Army Corps work plan causes 2019 shift in CBOT rules - yes, this happened and it may effect you
Friday, the CBOT issued a rule, effective June 2 for June 3, 2019 trades, changing the rules on delivery for corn, soybeans and wheat. The Army Corps has announced maintenance work in 2020 on the Illinois River that will heavily impact barge traffic in the Mid-Continent. That caused the CBOT to review its rules on barge load out procedures - specifically
"Due to the anticipated closure, the Exchange reviewed the language in Rule 703.C.G.(9) and found it to be outdated. Rule 703.C.G.(9) stipulates specific barge freight to be paid by the taker to the maker of delivery under this rule. However, since barge freight has become significantly more expensive in the last two decades, the amount specified in Rule 703.C.G.(9) is no longer relevant. "
In response, the CBOT changed Rule C.G.(9) to remove all fixed barge load out fees and substituted "current barge freight rates as the applicable fee. This is likely to insert a degree of price volatility in certain situations that many firms currently do not consider as a risk.
Another small example of how market regulation notices can have a spill over effect into risk management concerns.