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CME Group seeks feedback on extended hours

Published on January 30, 2013 3:01AM

Last changed on February 27, 2013 6:51AM


Capital Press

The CME Group is seeking industry feedback on its extended grain and oilseed trading hours.

The company made the switch last May, expanding from 17 to 21 hours per day.

In a press release, agricultural commodities and alternative investments managing director Tim Andriesen said the timing is right to review changes and industry feedback to ensure the company is meeting customer needs.

Dan Steiner, grain merchant at Pendleton Grain Growers, said his initial reservations about the change have eased. Many traders are still trading during the original hours, while some companies have extended their hours.

"Any time you extend the hours and you don't have your main traders in Chicago available, you can have some very volatile and violent price swings," Steiner said. "As it turns out, we haven't see anything that caused us any big problems."

Steiner said the volume has spread out over more hours, but hasn't changed very much.

"It works pretty well right now for everybody on the West Coast," he said.

If there was an impact, Steiner said, it came as USDA changed the timing of release of its monthly and quarterly reports. In January, the supply and demand estimates report was released at 9 a.m. Pacific time for the first time, instead of the traditional 6 a.m. Pacific time. Typically, the wheat market would have already done its initial response to the report, Steiner said.

This time, before the report was released, the wheat market went from being up 8 cents to down 15 cents, Steiner said. After the report was released, the market went up 25 cents.

"At least all of that happened while everybody had an equal chance at it," Steiner said. "All the participants were there at the table when it happened."

It's the sort of "weirdness" Steiner expected to result from the extended hours.

"The market sorted it out, the market will sort out anything," he said. "That's what it does. It takes a bunch of misinformation, random information and very good information, and it makes sense of it all."

He wasn't certain whether it would occur again during the next USDA report.

"The speculators really got spanked on this one," he said. "Some of these guys, it might sting for a little while. I would think they would be a little bit more cautious on the next report."

Steiner said the change hasn't impacted farmers at all. His company had to adjust its hours internally, but it hasn't caused huge adjustments, he said.

The company is engaging participants through one-on-one conversations, customer focus groups and an online survey.

The survey is available on CME Group's website through Jan. 31.




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