Reuters: Regulatory News: RJ O'Brien calls for delay in longer CME grain trading

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RJ O'Brien calls for delay in longer CME grain trading May 15th 2012, 14:36 Tue May 15, 2012 10:36am EDT * Brokerage backs grain groups in seeking delay * Groups want 30-day comment period on longer hours * O'Brien also wants markets shut during US crop reports CHICAGO, May 15 (Reuters) - Citing "grave concerns" from its customers, futures broker R.J. O'Brien on Tuesday joined top U.S. grain groups calling for a delay to the start of nearly around-the-clock grain trading by CME Group. The largest independent U.S. futures brokerage said in a statement t hat while longer hours could ultimately benefit the markets, it supported a push for a 30-day comment period on CME's plan to increase weekday trading for grain and soy futures and options to 22 hours from 17 hours. The delay will provide "additional time for public comment and industry response," it said. CME is slated to start its longer hours on May 21, and a 10-day review of its plan by the Commodity Futures Trading Commission will end on Wednesday. An effort to postpone the start of the extended trading hours was fueled by the National Grain and Feed Association and North American Grain Export Association. The planned shift to 22-hour trading at CME's Chicago Board of Trade, which dominates agricultural markets, has become a contentious issue among grain traders as it will keep markets open during key U.S. Department of Agriculture crop reports that often cause sharp swings in prices. R.J. O'Brien urged CME and rival IntercontinentalExchange , which launched new grain and soy contracts on Monday in a 22-hour trading cycle, to keep markets shut for two hours after the reports are released. A pause in trading from 7:15 a.m. to 9:30 a.m. Central time on days that reports are released "would give market participants adequate time to receive and analyze the comprehensive global reports, without producing unnecessary volatility and exaggerated price moves," R.J. O'Brien Chairman and Chief Executive Gerald Corcoran said. The markets currently are closed for 15 minutes before and two hours after monthly USDA crop reports are issued at 7:30 a.m. Central. "Our commercial customers and introducing brokers have grave concerns about the impact of trading straight through the release of the reports," Corcoran said. Once traders are prepared for the longer grain cycle, extended trading hours should benefit the markets, he said. "Electronic trading around the clock has greatly broadened participation in the markets and facilitated stronger risk management opportunities," he pointed out. Link this Share this Digg this Email Reprints

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