Grain News


NGFA Calls CME Group Decision to Reduce Ag Trading Hours "Positive First Step"

Date Posted: January 30, 2013

Continues to Recommend Trading Pause Around Release Times of Key USDA Reports

Washington—The National Grain and Feed Association (NGFA) called Jan. 29 the CME Group’s decision to reduce trading hours for its grain and oilseed futures and options contracts a “positive first step.”

The nation’s largest trade association representing commercial users of grain and oilseed futures markets noted it has been in frequent contact with the CME Group since the exchange decided last year to expand trading on its electronic trading platform to 21 hours per day.

As part of that continuing dialogue, the NGFA’s Risk Management Committee has discussed with the CME Group potential adjustments to electronic trading hours for grain and oilseed contracts, while also advocating strongly that the exchange maintain a synchronized closing time for its open-outcry pit trading and electronic trading on its Globex platform.

The NGFA 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.

Today’s CME Group announcement did not state the specific revised grain and oilseed trading hours under consideration, with the exchange saying only that it was “continuing to vet alternatives” with its customer base and would have more details “in coming weeks.”

The NGFA also said it continues 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.

The NGFA consistently has voiced concerns of many market participants that the release of such USDA reports during electronic trading hours potentially 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.

Participation of high-frequency traders also has raised concerns about volatile futures market moves immediately preceding and following the release of USDA reports, the NGFA said.

Established in 1896, the NGFA consists of more than 1,050-member companies from all sectors of the grain elevator, feed and feed ingredient, integrated livestock and poultry, grain processing, biofuels and exporting business that operate about 7,000 facilities nationwide and handle more than 70 percent of all U.S. grains and oilseeds.

The NGFA also consists of 26 affiliated state and regional grain and feed associations.

For further information, contact:

Todd Kemp, vice president of marketing and treasurer; 202-289-0873, ext. 16; tkemp@ngfa.org

Heather McElrath, director of communications; 202-289-0873; ext. 11; hmcelrath@ngfa.org

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