U.S. grain exchanges move to 21-hour trading

Grain exchanges in Chicago, Minneapolis and Kansas City are trading this week on a 21-hour day, following concerns from the grain sector about the costs of longer hours.

Chicago’s CME Group sparked those concerns on May 1 when it announced plans for electronic trading of its CBOT (Chicago Board of Trade) grain and oilseed futures and options for 22 hours a day (6 p.m. to 4 p.m. CT).

But CME said Thursday it will instead offer those CBOT futures and options for a 21-hour day — 5 p.m. to 2 p.m. CT — pending certification from the U.S. Commodity Futures Trading Commission (CFTC), which followed Friday.

Minneapolis-based MGEX and the Kansas City Board of Trade (KCBT) said in separate releases Friday they had received CFTC approval to expand their electronic trading hours also, matching the 21-hour CBOT trading day for all MGEX futures and options and for KCBT’s hard red winter wheat futures and options contracts.

Both MGEX and KCBT trade their products on the same CME Globex platform as CBOT. All three exchanges made the move to 21-hour trading effective Sunday (May 20).

Analysts have said they expect added volatility in the affected markets, noting for example that the markets will now be open when influential crop reports from the U.S. Department of Agriculture are issued.

Analysts have also said the exchanges’ expanded hours are a sign of a need for increased trading volumes, especially after IntercontinentalExchange (ICE) launched its own U.S. corn, soy and wheat futures earlier this month.

Atlanta-based ICE — which also runs Canadian canola, milling wheat, durum and barley contracts through its ICE Futures Canada arm in Winnipeg — operates on its own all-electronic platform with no open outcry.

"Normal business"

CME Group pulled back from its 22-hour plan "in response to significant feedback" from the grain industry, which had "clearly communicated that these hours best meet their risk management needs," said Tim Andriesen, CME’s managing director for ag commodities.

"This important change will provide time during normal business hours for grain, feed and grain processing operations and other merchants to reconcile their trading accounts and perform other required accounting and back-office operations without incurring the significant additional expense of hiring or providing overtime to employees performing these important functions," Randall Gordon, acting president of the Washington, D.C.-based National Grain and Feed Association, said in CME’s release.

CME said CBOT daily settlements would continue to be based on market activity at or around 1:15 p.m. CT each day, and its open-outcry trading hours will continue to run from 9:30 a.m. to 1:15 p.m. CT Monday to Friday.

MGEX said its open outcry trading hours for hard red spring wheat would remain unchanged from 9:30 a.m. to 1:30 p.m. CT, Monday to Friday, while its contract settlement period would remain at 1:14 p.m. to 1:14:59 p.m. CT.

KCBT said its wheat futures and wheat options would also continue to trade by open outcry from 9:30 a.m. to 1:15 p.m. CT Monday through Friday.

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