Thursday, CME Group altered its expanded trading hours request - still being reviewed by regulators - reducing the proposed trading day to 21 hours. This will allow involved parties the opportunity to transition to a longer trading day, a move that could change staffing needs and costs for a wide range of interested parties.
In response to the announcement, the National Grain and Feed Association and the North American Export Grain Association issued a joint announcement that it has withdrawn its request for a public comment period on the expanded hours. The request had been made to the Commodity Futures Trading Commission. They two groups had asked for a 30-day comment period on the exchange's plans for expanded electronic trading.
In addition, the two groups also commended the Kansas Board of Trade for amending its expanded trading hours to match those at CME Group, which will close trading between 2 and 5 p.m. Central time. And the two groups say they expect the MGEX to do the same. Previously the exchanges had proposed closing trading between 4 and 6 p.m. Central time.
While the two groups are standing down on the 30-day comment period, in their statement they stressed that they continue to work with the exchanges to address a still-unresolved industry concern - the release of key USDA data during electronic trading hours. Those reports, which are quite detailed, need some "digesting" by analysts but that rumination time goes away with longer electronic trading hours.
The NGFA and NAEGA noted there is concern from many market participants that the release of such USDA reports during electronic trading hours 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.
The action by CME to amend its trading hours "demonstrates the value of the ongoing collaboration between the exchange and users of grain and oilseed futures and options markets who rely heavily on the CBOT contracts to hedge market risk," says NGFA Acting President Randall Gordon. "This important change will provide time during normal business hours for grain, feed, grain processors and other merchants using grain and oilseed futures and options to reconcile their trading accounts and perform other required accounting and back-office operations."
This "business hours" move is seen as a way of containing potential higher over-time or added staffing costs that the original longer trading hours might have incurred.