Reuters: Regulatory News: UPDATE 1-US grain groups urge CFTC to delay expanded grains trading

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UPDATE 1-US grain groups urge CFTC to delay expanded grains trading May 10th 2012, 20:39 Thu May 10, 2012 4:39pm EDT * Grain groups want 30-day public comment on longer trading * ICE slated to start 22-hour trading on Monday * Groups worry about USDA issuing data during active trading By Tom Polansek CHICAGO, May 10 (Reuters) - The top U.S. grain groups on Thursday called for federal regulators to delay the start of 22-hour grains trading at CME Group and rival IntercontinentalExchange. In a joint statement, the National Grain and Feed Association and the North American Export Grain Association said "inadequate advance consideration" of how the longer trading days will affect market participants justified intervention by regulators at the Commodity Futures Trading Commission. The groups urged the CFTC to institute a 30-day public comment period on planned moves to 22-hour trading at both exchanges. "Neither the ICE contracts nor the CME Group's plan to expand electronic trading hours were vetted properly with appropriate market participants," the grain groups' statement said. A CFTC spokesman said he did not immediately know how the commission would respond. ICE is slated to launch new U.S. grain and soy futures and options contracts with 22-hour trading on Monday. CME, owner of the Chicago Board of Trade, is slated to expand trading for its benchmark grain and oilseed contracts on May 21. Grains futures and options at the CME now trade for 17 hours daily Monday to Friday. CME and ICE did not immediately respond to requests for comment. A key concern is that the shift to 22-hour trading will keep the grain markets open when the U.S. Department of Agriculture issues highly anticipated crop reports that often cause sharp moves in futures prices. It would be prudent to keep the markets shut when crop reports are released, or to implement a break in trading activity when data are released, the grain groups said, arguing that participants need a chance to analyze information and adjust their market positions before trading resumes. "Trading through the release of these reports could lead to extreme volatility immediately following their release," the groups said. "Further, there is currently unequal access to USDA report data because of different Internet connection speeds and analysis capabilities." Link this Share this Digg this Email Reprints

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