21-Hour Grain Trading Has Some Noticeable Impacts In First Week

May 25, 2012 01:04 AM

What Traders are Talking About:

* 21-hour grain trading brings some changes. With the first week of 21-hour electronic grain trade at the Chicago Board of Trade, Kansas City Board of Trade and Minneapolis Grain Exchange about in the books, there have been some noticeable trends. Screen (electronic) trade has "flinched" -- up or down -- right around the time pit (open-outcry) trading has begun every day this week. Also, "after-hours" trade from the end of pit trade at 1:15 p.m. CT to the end of electronic trade at 2 p.m. CT has been relatively quiet. But the most notable trend has been increased price volatility. While there are fundamental reasons -- weather and macro-economics -- behind higher price volatility this week, it's probably no coincidence the increased volatility also came on the first week of extended grain trading. With nearly around-the-clock grain trading, a constant flow of market information and strong price influence from outside markets, high price volatility appears to be here to stay.

The long and short of it: Embrace the changes and the increased volatility while sticking with your marketing plan and take advantage of the opportunities markets present. While high volatility can be maddening at times, it often equates to better selling opportunities. Use the volatility to your advantage.

* USDA pondering moving grain report release time. USDA held a meeting with grain industry officials yesterday and is reportedly considering moving the release time of its grain reports to mid- to late morning, according to attendees of the meeting. USDA Chief Economist Joe Glauber reportedly told attendees USDA will soon seek a 30-day comment period on moving the report release time. But any change would not come before the June 12 Crop Production and Supply & Demand Reports.

The long and short of it: If CME Group gets approval from the Commodity Futures Trading Commission to adjust open-outcry trading hours, including starting pit trade at 7:20 a.m. CT on days of USDA reports, which they are reportedly seeking, there wouldn't be an urgency for USDA to move it's report release time. But change is in the air, so a shift in the report release time is not out of the question.

* Happy Memorial Day. Grain and livestock markets will trade normal hours today ahead of the holiday weekend. Markets and government offices are closed Monday, May 28, for Memorial Day. Have a happy and safe holiday weekend as you celebrate the unofficial start of summer.

The long and short of it: As you are celebrating this weekend, take a moment to remember the real reason we have Memorial Day -- to honor those who gave their lives serving our great country.


Follow me on Twitter: @BGrete

Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

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