The CME Group on Tuesday released a letter to its customers announcing a reduction in grain and oilseed trading hours, pending CFTC approval.
CME says its customer input survey is still underway, but enough responses have been received to warrant the change. CME notes that more specifics on the reduction will be available in coming weeks.
Additionally, CME says it "understands the frustration" of many customers in regards to a trading pause or halt to evaluate report data. CME reports it is "open to considering a market pause allowing participants to evaluate the data if all exchanges and trading venues would do the same."
CME also would support a halt, as long as it was unified for all venues, as that would best benefit all customers by ensuring the necessary market liquidity needed for effective price discovery.
In response to the announcement, the National Grain and Feed Association said the decision was a "positive first step," noting that 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.
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 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 statistical and economic reports during electronic trading hours. They say release 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.