22-Hour Trade Days for Kansas City, Minneapolis


by Chris Clayton, DTN Ag Policy Editor

OMAHA (DTN) — CME Group announced Thursday its expanded electronic trading hours of grains and oilseeds will start May 21 after the commodity exchange’s regulator raised questions Wednesday over a procedural filing.Following suit with not only CME Group, but also the Intercontinental Exchange, the Minneapolis Grain Exchange (MGEX) and Kansas City Board of Trade (KCBOT) both announced expanded trading hours as well.

The expanded trade hours subject has raised questions among grain elevators about how to manage settlement prices when the open pit trade closes while electronic trade continues. USDA also has said that expanded hours could affect the way that monthly crop reports are released.

CME Group also added expanded trading hours for its CBOT denatured fuel ethanol as well. Effective May 20 for trade starting May 21, CME will have 22-hour trading on futures and options for corn, soybeans, wheat, soybean meal and soybean oil, rough rice and ethanol, as well as “mini-sized” corn, soybeans and wheat.

While CME Group is allowed to self-certify a change in the trading hours, the exchange still must file the proper paperwork with the Commodity Futures Trading Commission. The CFTC requires that paperwork be submitted at least 10 business days before the actual change occurs, partly to allow people to comment. CME did not meet the timeframe to file that paperwork to begin 22-hour trading May 14, the original date the CME had pegged for its expanded grain trade.

“Once that self-certification is received, it would be posted on the commission’s website,” said David Gary, a CFTC spokesman told DTN Wednesday.

The CFTC is given 10 days to examine the application and determine if the commission has a problem with it.

CME Group initially announced Tuesday that it would expand electronic trading hours for CBOT grain and oilseed futures to 22 hours a day, running effectively from a 6 p.m. CDT open to 4 p.m. close Monday through Friday, and starting up trade again Sunday at 5 p.m. CDT.

Yet, the open-outcry, or trading floor, at CME Group will continue to trade those contracts from 9:30 a.m. to 1:15 p.m. CDT Monday through Friday.

The CME’s move comes after ICE had announced earlier that it would offer corn and soybean contracts starting May 14 as part of an expansion into more North American agricultural markets. The ICE trading will begin at 7 p.m. CDT and close at 5 p.m. EDT.

CBOT grain markets now have electronic trading from 6 p.m. to 7:15 a.m. Electronic trading also then runs parallel to the open-outcry trade.

The Kansas City Board of Wheat announced hard red winter wheat futures and options will trade electronically from 5:00 p.m. to 4:00 p.m. CDT for Monday sessions, which begin Sunday evening. Trading hours for Tuesday through Friday sessions are 6:00 p.m. to 4:00 p.m. These also begin the previous evening.

The change goes into effect Sunday, May 20, 2012 for trade date May 21, in coordination with trading hour changes at the CME Group.

KCBOT stated daily settlements will continue to be based on the 1:15 p.m. CT close each day.

MGEX announced expanded trading hours for all futures and options contracts, including its Hard Red Spring Wheat contract, beginning Sunday, May 20, 2012 for trade date May 21, 2012. Market participants will now have the ability to manage price risk using the exchange’s flagship contract for 22 hours per trading day Monday through Friday and 23 hours per trading day Sunday to Monday.

According to the CFTC, the CME Group, KCBOT and MGEX will all have to file appropriate paperwork within 10 business days before starting the expanded hours. That would give some time for market participants to comment. ICE has already filed the appropriate paperwork to begin its contracts. The filing information can be found at http://sirt.cftc.gov/


© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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