The Chicago Mercantile Exchange (CME) announced it will move to a 22-hour trading schedule for its grain futures markets. This announcement has come on the heels of upstart InterContinentalExchange debut with a 22-hour schedule. But the move has raised concerns.
The National Grain and Feed Association (NGFA) said that having the markets open at times when the USDA releases its crop reports will have negative effects on the futures markets.
"In particular, accessing those reports is not generally a quick and simple process," said a NGFA statement. "There may be competitive advantages for firms or individuals who are able to access and process report information earlier than others."
Trading on report days tends to attract the heaviest trading volume and can have the wildest price variations. Concerns exist that, in an effort to act on report data, reports may not be analyzed as closely as otherwise and volatility will increase.
Another CME proposal, this one to move to a blended electronic and pit settlement by June, has drawn similar criticism from futures analysts. A primary concern with this proposed blended settlement is that electronic trading systems will have an undue advantage and distort the market.
The National Grain and Feed Association (NGFA) said that having the markets open at times when the USDA releases its crop reports will have negative effects on the futures markets.
"In particular, accessing those reports is not generally a quick and simple process," said a NGFA statement. "There may be competitive advantages for firms or individuals who are able to access and process report information earlier than others."
Trading on report days tends to attract the heaviest trading volume and can have the wildest price variations. Concerns exist that, in an effort to act on report data, reports may not be analyzed as closely as otherwise and volatility will increase.
Another CME proposal, this one to move to a blended electronic and pit settlement by June, has drawn similar criticism from futures analysts. A primary concern with this proposed blended settlement is that electronic trading systems will have an undue advantage and distort the market.
