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Report day halt to trade?

Updated: 05/15/2012 @ 11:13am

Futures brokerage R.J. O'Brien called on CME Group Inc. (CME) and IntercontinentalExchange Inc. (ICE) to halt grains trading on mornings when the U.S. Department of Agriculture issues monthly and quarterly crop reports.

The call comes as both exchanges implement 22-hour trading for the grains markets. ICE launched new futures contracts Monday, and CME plans to start its 22-hour day, up from 17 hours, for its existing contracts starting May 21.

The expanded schedule means that the market would be trading when the USDA issues reports on grain supply and demand. Those reports are released at 8:30 a.m. ET, two hours before CME futures have opened under the existing schedule. The reports often cause sharp price swings, and some traders say the market could become extremely volatile when USDA numbers are released.

"Our commercial customers and introducing brokers have grave concerns about the impact of trading straight through the release of the reports," R.J. O'Brien Chairman and Chief Executive Gerald Corcoran said in a statement.

But the firm added it is "a strong advocate of around-the-clock electronic trading in futures markets."

R.J. O'Brien is the 11th-largest futures commission merchant in the U.S., with $3.8 billion in customer funds on deposit as of May 1, according to filings with the Commodity Futures Trading Commission.

The CME's plan for an extended trading day is currently in a 10-business-day waiting period required by the CFTC.

-By Ian Berry, Dow Jones Newswires; 312-750-4072;
--Jacob Bunge contributed to this article.
(END) Dow Jones Newswires
May 15, 2012 09:21 ET (13:21 GMT)
DJ R.J. OBrien Calls For Halt To Grain Trade On USDA Report Days->copyright

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