After being approved by the Commodity Futures Trading Commission the CME Group has expanded electronic grain futures trading to 21 hours. Trade now only stops between 2 p.m. and 5 p.m. Central each day. The new trading schedule started at 5 p.m. on Sunday.
CFTC Commissioner Bart Chilton says he’s satisfied the three hours of downtime each day is enough to take care of the operational and logistical needs in the market, especially with elevators. But Chilton is concerned about the grain markets being open during USDA report releases. “They’re going to try to reach some accommodation. They’ve worked with USDA but for the near term they’ll be trading during those times. Now I’m not so sure that’s ultimately a bad thing. There are already some of the softs, coffee, cocoa and sugar that are traded when the reports come out, but it’s a different thing. It hasn’t happened in the past so people are going to have to get used to that.” He says the CME Group had proposed plans including halting trade for an hour after report release, but ICE has indicated it will not stop trade. So the CME Group will follow suit at least through the June 12 USDA report. Chilton says he wants to continue the dialogue because he’s not sure this is the best option for farmers. “I think it’s really going to benefit these cheetah traders, high frequency traders, because they’ll be trading around the USDA stuff. Producers may, co-ops may trade around it, but traditionally that’s not what’s happened. So I just wanted to ensure that we had a reasonable time period that allowed us to look at these things. And in general I think that we need to guarantee that price discovery and risk management are the uppermost priorities in all of these markets.” Chilton says the original intent of the markets was to provide risk management for farmers and end users, not for the exchanges to make money.