How technology is changing Futures & Crop Reports

by Cindy
National Corn Growers Association

As the world moves closer to trading around the clock, the future of crop report release times is being pondered.

Some options being considered include changing the reports to the afternoon or running them on weekends to take them out of live trading time. The Chicago Mercantile Exchange just started electronic trading 21 hours a day and intends to offer expanded floor trading hours for CBOT grain and oilseed futures and options during major crop reports, pending CFTC certification. According to CME, the floor trading open would be “changed to 7:20 a.m. CST from 9:30 a.m. CST on mornings of specified reports beginning June 12, 2012 for the USDA WASDE and Crop Production reports.”

With that in mind, USDA is reviewing release times for the major statistical reports that tend to move markets, including World Agricultural Supply and Demand Estimates, Acreage, Cattle, Cattle on Feed, Crop Production, Grain Stocks, Prospective Plantings, Quarterly Hogs and Pigs, and Small Grain Summary. USDA plans to seek public comment on the issue, which will mean it will be months before any change will be made. Until then, the current USDA release times of 8:30 a.m. and 3:00 p.m. ET will remain in effect.

“It is important that USDA continue to ensure the integrity of its report release process, particularly as global exchanges move closer to 24-hour trading,” said USDA Chief Economist Joe Glauber. “To this end, USDA is reviewing our procedures and will solicit public input to determine the needs of those who use our data.”

In a recent letter to the chairman of the Commodity Futures Trading Commission, the National Corn Growers Association requested a 30-day public comment period before grain traders are allowed 22-hour-per-day electronic trading of grain and oilseed futures contracts. NCGA believes it is important for CFTC to take input and further analyze the proposals from the Intercontinental Exchange (ICE) and the CME Group. “As currently formulated, both ICE’s plans for new contracts with greatly expanded trading hours and the CME Group’s plans to expand hours raise serious issues that potentially place the Nation’s corn growers at a marketing disadvantage,” wrote NCGA President Garry Niemeyer.

NCGA is concerned that extended trading hours could lead to “extreme” market volatility and problems for growers who track the futures to make marketing decisions.

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