WASHINGTON
(May 17, 2012) – National Farmers Union (NFU) President Roger Johnson sent a
letter to Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler
today urging the chairman to establish a 30-day public comment period to
discuss the extension of electronic commodity trading up to 22 hours per day.
“The
decision of the Intercontinental Exchange (ICE) to expand trading to 22 hours
daily and the announcement of the CME Group’s plan to do the same have alarmed
many of NFU’s members, many of whom are involved in the cash grains market,”
said Johnson. “Concerns regarding the volatile price swings that occur when
U.S. Department of Agriculture reports are released have been voiced.
Additionally, NFU members are uncertain about the availability of accurate and
updated bids from grain purchasers after the open outcry trading day has closed
with an established settlement price but electronic markets remain open.
Farmers need an explanation and answers to these reasonable questions.”
The
electronic market currently trades for 17 hours each day. The expanded trading
would allow for nearly-around-the-clock trading, often for those without a
commercial interest in the market, while doing little to benefit farmers and
ranchers.
“The
public, especially farmers and others with an interest in fair and functional
markets, would be well-served if the CFTC were to allow for further dialog,”
said Johnson. “Given these concerns, along with the very recent introduction of
a 21-hour trading day by CME Group at the end of the most recent CFTC review
period, NFU asks that a 30-day comment period be opened. Stakeholders in the
grain and oilseeds markets need further opportunity to understand and provide
input about the proposed changes.”
Click here to view the letter sent to the CFTC.
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