AIG To Offload Grains Longs Off The Market - CME

CBOT owner CME has said it has allowed ailing AIG to offload some of its longs on grains & livestock markets via "block trades."

Block trades are held outside the public auction market. The idea being that a sudden large volume of sell or buy orders on the CBOT market could lead to violent price-swings, essentially limiting AIG's ability to operate effectively.

The emergency move appears to allow AIG, which was bailed out of potential bankruptcy on Tuesday by a $85 billion (47.5 billion pounds) Federal Reserve rescue package, to offload some of the positions it has built up by selling investment based on its co-owned Dow Jones-AIG Commodities Index, the second-largest of its type.

The DJ-AIG index of 19 major contracts had attracted investment of about $55 billion by the end of the second quarter, just before commodities markets tumbled by a third.