A tongue-in-cheek rally with a serious aim
A small crew of University of Chicago students set up on the sidewalk by the Chicago Mercantile Exchange, giant red onion mascot in tow, asking for signatures to repeal a 68-year-old ban on onion futures. Their group, For Our Futures, showed up with bags of onions from a restaurant supplier and "Free the Onions" shirts and stickers.
The setup was playful, the goal was not. They argue today's tougher manipulation rules make the prohibition obsolete. "This is not the most important law in America, but this is precisely why it matters to us," said Adam Ash, the group's founder and a UChicago economics major, as classmates chanted and handed out onions. He said the idea started with students disenchanted with politics who wanted to prove they could change one specific law. As participant Lilly Kuskovsky put it, "You can have fun and still do things that are good for the world."
Market heavyweights weigh in - and pushback arrives
Kalshi backed the rally, sending a few representatives and footing the bill for stickers, T-shirts and transportation. The company had already flagged the students' campaign in May and, after last week's event, CEO Tarek Mansour reposted a video from outside the CME and called the students "patriots." In separate posts, he wrote, "Onion farmers deserve predictability," and "Unban onion futures." For Our Futures said they picked the CME location over the summer after other protests earlier in the year, and that Kalshi only got involved after the event was planned, providing T-shirts and stickers just days before it happened.
CME Group pushed back, saying it was "surprised" to see Kalshi support the protest. "As Kalshi claims it wants to democratize markets, supporting the reversal of a law put in place in 1958 to protect against market manipulation seems an unusual choice," a spokesperson said.
Others took the opposite view. A Polymarket legal executive also weighed in as the debate widened to prediction markets more broadly.
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How onions got banned in the first place
In the 1950s, two traders cornered the onion market. Prices later collapsed, devastating farmers, and accounts from the time describe producers dumping mountains of worthless onions into the Chicago River. In 1958, President Dwight Eisenhower signed the Onion Futures Act, which bans onion futures "on any board of trade in the United States."
There is no offshore workaround. No exchange anywhere lists onion futures, and India's National Commodity & Derivatives Exchange once planned a contract but never launched it. The National Onion Association, which pushed for the prohibition in the 1950s, still supports it, citing then president Veril Baldwin's 1956 view that the crop spoils quickly, has a brief season, is highly susceptible to manipulation, and represents an industry too small for futures trading. "Growers fought for this protection, and we continue to stand behind it," the association said.
Chicago's onion roots run deep. Many trace the city's name to shikaakwa, an Algonquian term linked to the wild onions and garlic formerly found along the downtown stretch of the river.
The bigger market question
The skirmish lands as prediction markets test old boundaries. Kalshi has been adding new contracts to pull in more traders, including expanding its commodity lineup this year. To some, the onion ban has become shorthand for heavy-handed derivatives rules that no longer fit. A Kalshi spokesperson argued that for 68 years onions have stood out as the only crop Congress has kept Americans from hedging - unlike oil, wheat, or pork bellies - and added an apology to growers who've lacked a hedge since the Eisenhower era.
Scott Irwin, a University of Illinois agricultural economist, called the current period an era of tremendous innovation, from Kalshi to crypto, making it jarring that some trades remain illegal. He said the 1958 law was a "near-death experience" for the CME, wiping out one of its biggest contracts overnight, likely increased onion price volatility, and forced the exchange to innovate into livestock, then currency and financial futures, and eventually electronic trading.
The bottom line: CME is defending the 1958 protection, while students and several market figures say the rule is outdated and that hedging tools should be allowed to find their market. That tension matters for your portfolio because it signals where regulators might draw the lines on what risks can be hedged and where innovation meets a hard stop.
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