Traders and farmers smarting from the MF Global bankruptcy still haven’t forgotten the feeling of betrayal. Any futures market works best when trust is at a high level, but rebuilding that trust following last fall’s losses will take time.
However, the trust factor remains a big challenge for the CME Group, owner of the Chicago Board of Trade, after several missteps in responding to the announcement by the InterContinental Exchange, or ICE, that it would begin trading cash-settled grain contracts 22 hours per day. Weekly changes to the CME Group’s plan left many in frustration, with farmers, grain elevators, option and futures traders waiting for the next press release, wondering if their interests are being considered.
As a result, a member of the trade began circulating a survey to measure industry sentiment about the grain futures market and its usefulness to the industry. It's an opportunity for those in the trade to share their impressions back to CME Group.
Anyone impacted by the futures market is encouraged to take the survey over the next few days, with the results expected to be submitted to the CME Group in the days ahead. The survey is open to anyone impacted by market changes.
Changes in trade hours, while offering enhanced opportunities to market crops, have created consternation in the industry. One factor still not worked out is how release of key USDA reports during open trading hours will impact volatility and the markets. CME Group has already worked to accommodate some of that by expanding pit trade hours on key market days with an early-morning open at 7:20 a.m.
Meanwhile USDA is considering a public comment period to review potential changes to market release times. That comment period time has not yet been determined. Concern over release of those in-depth reports with little time for review or reflection could impact initial price volatility.