CME to shorten livestock futures electronic trading hours

Chicago | Reuters — CME Group will scale back electronic trading hours for its livestock markets following customer feedback, the exchange announced on Friday.

The markets affected are CME (Chicago Mercantile Exchange) lean hogs, live cattle and feeder cattle futures and options. The changes are effective Oct. 27 and follow responses to an exchange survey of its customers, including producers, commercial customers and traders.

“Over the past several months, we have been engaging with a broad cross-section of customers and industry participants… and based on that feedback we have determined we should reduce electronic trading hours for our livestock products,” said Tim Andriesen, CME Group managing director of agricultural commodities and alternative investments.

Amended livestock electronic trading hours will be Monday from 9:05 a.m. to 4 p.m. CT, Tuesday to Thursday at 8 a.m. to 4 p.m. CT, and Friday 8 a.m to 1:55 p.m CT.

Currently, electronic trading in futures contracts for live cattle, lean hogs and feeder cattle only closes from 4 p.m. to 5 p.m. CT from Monday to Thursday.

On Friday, the trading stops at 1:55 p.m. CT and resumes on Monday at 9:05 a.m CT.

Open outcry trading hours, which will not be affected by the change, run from 9:05 a.m. to 1 p.m. CT from Monday to Friday.

Cutting back hours on the world’s biggest platform for trading cattle and hog futures will concentrate volumes, which should calm market volatility, analysts and traders said.

“There is such little volume done overnight that it is negligible. It is only enough for the operators to run stops, creating opportunities for them to fleece the rest of us,” said Dan Norcini, who trades livestock futures from his Idaho home.

Joe Ocrant, president of Oak Investment Group and a live cattle futures trader, said the abbreviated hours will have only a marginal impact on overall live cattle trading volume.

“The volume seems to die out after 9 p.m. CDT and does not pick back up until after 6 a.m. CDT. There is not any fundamental information overnight, and I do not believe that European and Asian traders trade much cattle,” he said.

From January through September, combined pit and electronic trading volume for CME live cattle totaled 10,565,644 contracts, up 9.2 per cent from a year earlier, based on CME Group data.

The total for lean hogs was 8,679,324 contracts, down 2.7 per cent from last year. And combined feeder cattle volume totaled 1,545,522, up 20.5 per cent from a year earlier.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

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