CHICAGO, ILLINOIS, U.S. — CME Group announced on May 17 measures to help farmers, ranchers and commercial market participants prepare to transition to expanded electronic trading hours for CBOT grain and oilseed futures and options on CME Globex. CME Group will now offer expanded market access to a variety of CBOT futures and options 21 hours per day, pending CFTC certification.
“What sets CME Group apart is our close working relationship with the grain industry, who have made our grain and oilseed futures the benchmark risk management products,” said Tim Andriesen, managing director, Agricultural Commodities and Alternative Investments, CME Group. “That’s why, in response to significant feedback for this customer segment, we’re further amending CBOT grain and oilseed trading hours to 5 p.m. to 2 p.m. CT Sunday through Friday. They have clearly communicated that these hours best meet their risk management needs.”
These measures are in part the result of collaboration between CME Group, the National Grain and Feed Association (NGFA) and the North American Export Grain Association (NAEGA) to address these changes and help the grain industry prepare for the transition.
“This action by the CME Group demonstrates the value of collaboration between the exchange and users of futures and options markets who rely heavily on the CBOT contracts to hedge marketplace risk,” said Randall C. Gordon, acting president of the NGFA. “This important change will provide time during normal business hours for grain, feed and grain processing operations and other merchants to reconcile their trading accounts and perform other required accounting and back-office operations without incurring the significant additional expense of hiring or providing overtime to employees performing these important functions.”
“We commend the CME Group for making this change before implementing its expanded electronic trading hours,” Gordon added. “We look forward to continuing to discuss with the CME Group, other exchanges and other parties possible ways to address industry concerns about USDA reports being released during market hours.”
In coordination with CME, the Kansas City Board of Trade (KCBT) announced on May 17 a modification to its previously announced expansion of electronic trading hours for the KCBT's flagship hard red winter wheat futures and options contracts.
The KCBT filed a new rule submission setting forth daily (Sunday through Friday) extended electronic trading hours of 5 p.m. to 2 p.m. CT for Hard Red Winter Wheat futures and options.
The effective date of the new extended trading hours will be coordinated with and announced by CME Group. Daily settlements will continue to be based on the 1:15 p.m. CT close each day.
CME wheat futures and wheat options will continue to trade by open outcry from 9:30 a.m. to 1:15 p.m. CT Monday through Friday.
Electronic trading hours for CBOT Corn, Mini-Sized Corn, Soybeans, Mini-Sized Soybeans, Wheat, Mini-Sized Wheat, Soybean Meal, Soybean Oil, Rough Rice, Oats and Ethanol futures and options plus all related calendar spread options and inter-commodity spread options will be extended to:
Sunday to Friday, 5 p.m. to 2 p.m. CT
Daily settlements will continue to be based on market activity at or around 1:15 p.m. CT each day. Additionally, open-outcry trading hours will continue to operate from 9:30 a.m. to 1:15 p.m. CT Monday to Friday.
The NGFA and NAEGA also stressed that they continue to work with the CME Group and others to address a still-unresolved industry concern – the release of key U.S. Department of Agriculture (USDA) statistical and economic reports during electronic trading hours. Currently, electronic and open-outcry trading does not begin until 9:30 a.m. Central time, two hours after the release of crop production, crop progress, grain stocks, planted acreage and other potentially market-moving USDA reports.
The NGFA and NAEGA noted there is concern from many market participants that the release of such USDA reports during electronic trading hours could increase market volatility and disadvantage some market participants because of unequal access to USDA report data in a timely manner because of such factors as lower Internet bandwidth speeds in rural areas.
“NAEGA and the NGFA strongly commend the CME Group for its willingness to listen to customer concerns and to respond to them in a positive way,” said NAEGA President and Chief Executive Officer Gary C. Martin.