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Farm futures volume drops

03/07/2012 @ 1:24pm

CHICAGO, Illinois (Agriculture.com)--With trade volume off 40% from February 2011 to February 2012, many CME Group floor traders await the 'next big thing' to spark investors.

Though the next 'big' thing could be the USDA's March Planting Intentions Report, there's no denying the farm markets have been slowed.

Scott Shellady, ICAP Energy LLC derivatives manager and CME Group floor trader, says a 50¢ range in the corn market, since October, has not helped boost trade activity.




Separately, other market participants wonder if the trade volume has been directly affected by the MF Global bankruptcy.

In November, the brokerage firm filed for bankruptcy after investigations showed $1.2 billion of client funds were lost when client funds were commingled with the firm's own investment money to meet margin calls.

"Every time I think the MF Global debacle is behind us, a client calls up and has more to say about the problems that event caused for his portfolio," one grain analyst, requesting anonymity, tells Agriculture.com.

Three federal agencies and two bankruptcy trustees continue to work on untangling the mess.

Though investigators reported last month that they have discovered what happened to all of the money lost, the findings are not being released.

Some impacted investors in the futures market say 78% of their lost money has been returned, but remain concerned as to whether the remaining 28% will arrive.

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Scott Shellady: Options 101