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CME expands pit trading hours

Jeff Caldwell 06/08/2012 @ 1:36pm Multimedia Editor for Agriculture.com and Successful Farming magazine.

A few weeks ago, CME Group officials expanded electronic trading hours, leaving a 3-hour break in the afternoon each trading day. But, the hours didn't quite mesh with pit trading, something that garnered criticism from some farmers and analysts.

On Friday, CME Group officials announced they're shoring up the gap in trading time, expanding pit trading to 2:00 PM Central Time each trading day. Now, open outcry and electronic trading both end at the same time, with electronic trading resuming again at 5:00 PM after a 3-hour break.

The change in pit trading, which will take effect on June 25, will include the following contracts:

  • CBOT corn

  • Mini-sized corn

  • Soybeans

  • Soybean meal

  • Soybean oil

  • Rough rice

  • Oats futures & options

  • All related calendar spread options and inter-commodity spread options

"Daily settlements will move from 1:15 p.m. CT and will be based on market activity at or around 2 p.m. CT each day for the Grain and Oilseed futures and options as well as for Ethanol futures and options," according to a CME Group report.

Speculation arose earlier this week that USDA may be adjusting the timing of the release of its major monthly crop production, supply and demand, and grain stocks reports to coordinate with the new CME hours. Whether or not that happens doesn't change the fact that the trading session expansion is another step toward an all-electronic grain trade, farmers and traders say.

"If I was a floor trader I'd be grumbling. You now have to stay an extra 45 minutes each day, and on major crop report days you need to be amped up and ready to go at 7:20," says Agriculture.com Marketing Talk frequent contributor glenlivet18. "Nearly 7 hours straight on the floor is a long time. Of course. pit trading will eventually be done away with, and then it won't matter."

Adds Marketing Talk senior contributor highyields: "It might settle down some by the opening of the pit trade. Course if your the wrong way with the report you probably won't get much sleep that night. Get yourself set up for electronic trading."

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