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NGFA Requests One Hour Trading Pause After USDA Report Releases

The National Grain and Feed Association today submitted a statement to the U.S. Department of Agriculture urging that a one-hour pause in open-outcry pit and electronic trading be implemented surrounding the release of the department's key agricultural statistical reports. 

While acknowledging that implementing and enforcing such a pause likely is beyond the control of USDA, NGFA said it believed the department still had a "clear interest in helping create an environment in which its major statistical reports do not roil markets to the extent that producers and agribusiness firms reliant upon them are disadvantaged or competitively harmed."  The NGFA said it would "welcome the opportunity to work closely with USDA, the Commodity Futures Trading Commission, commodity exchanges and other stakeholders to reach a reasonable solution."

"We are very concerned that releasing major reports during trading hours will create significant new volatility in markets," particularly if USDA reports contain unexpected data, the NGFA said. "A pause would help facilitate a rational review of the data and perhaps less volatility when markets reopened."

The NGFA's statement was submitted in response to USDA's notice requesting comments on the public release times of several of its major agricultural statistical reports, given the expansion of electronic trading to 22 hours on the InterContinental Exchange and 21 hours at the CME Group, Kansas City Board of Trade and Minneapolis Grain Exchange.  Currently, there is no time of day when CME Group, KCBT, MGEX and ICE grain and oilseed markets are closed. 

USDA is reviewing the release times of the following statistical reports:  1) World Agricultural Supply and Demand estimates; 2) Acreage; 3) Cattle; 4) Cattle on Feed; 5) Crop Production; 6) Grain Stocks; 7) Prospective Plantings; 8) Quarterly Hogs and Pigs; and 9) Small Grains Summary.  While expressing a willingness to consider changing the release times of its reports, USDA officials have stated that it will retain its current release times of 8:30 a.m. and 3 p.m. Eastern time until its review is completed.

NGFA said a one-hour trading pause surrounding the release of key USDA statistical reports would:

-Help ensure timely and more equal access to such reports for a wider range of market participants, including producers and small businesses without high-speed Internet service and/or sufficient personnel to immediately download and assess such reports.

-Provide producers and agribusiness firms that use futures and options markets to hedge marketplace risk time to prepare for "potentially dramatic" market price moves as a result of information contained in the reports.

Even with a one-hour trading pause, the NGFA urged NASS and WAOB to prepare and simultaneously issue a one-page summary of key facts contained in such statistical reports to help "ease competitive concerns resulting from unequal access to report data."

Further, the NGFA urged that major NASS and WAOB statistical reports be released at a time of day when, once markets reopen, the greatest trading volume and deepest liquidity exist.   The NGFA cited the importance of doing so in particular surrounding the release of USDA's "World Agricultural Supply and Demand Estimates," "Acreage," "Crop Production," "Grain Stocks" and "Prospective Plantings" reports.  "This will help market participants cope with the added volatility we believe is virtually certain to occur as reports are released during an extended trading day," the NGFA said.