CME Group backs off on trading hour expansion

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Jan. 31, 2013- CME Group Inc., which controls the world's largest grain market, said in a letter to its customers this week that it will reduce trading hours for its grain and oilseed futures and options contracts.

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The move represents a reversal from a decision in May 2012 to extend electronic trading hours from 17 to 21 hours per day. However, CME said that after customer feedback and a formal survey of market participants that is still underway, “we have enough of your responses to be able to decide to reduce trading hours for our grain and oilseed markets.”

The letter, signed by CME Group President Terrence Duffy and CEO Phupinder Gill, said more specifics on the revised hours will arrive within the next few weeks and that the exchange is “continuing to vet alternatives,” because “there were varying opinions on what the reduced hours should be.”

The National Grain and Feed Association (NGFA) called the decision a “positive first step,” but said it would “withhold further comment until after providing additional input to the CME Group on the details of its reduced trading hours as part of the exchange's customer outreach being conducted this month.”

CME Group also indicated support for a market pause during the release of USDA reports, since “it understands the frustration of many of our customers, and we are open to considering a market pause allowing participants to evaluate the data if all exchanges and trading venues would do the same.”

NGFA maintained that releasing USDA reports during electronic trading hours “potentially could increase market volatility” and cause a disadvantage for participants in rural areas with lower Internet bandwidth, for example.

CME Group stated in its letter that it would support a market pause, “as long as it was unified for all venues.”

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