CHICAGO, April 30 (Reuters) – CME Group Inc appeared
to be gearing up for a challenge by rival
IntercontinentalExchange Inc for a share of the grains
market, with Chicago traders citing widespread talk that the CME
was planning to extend the trading day to 22 hours.
CME, which has a stranglehold on grains trading through the
Chicago Board of Trade, which it acquired in 2007, said it had
“no formal announcement” to make regarding the rumors, which
come just weeks after its Atlanta-based rival announced plans to
launch look-alike corn, wheat and soybean contracts.
Traders said the CME was planning for grains to be traded
from 6 pm CDT (2300 GMT) straight through to 4 pm CDT (2100 GMT)
— allowing for the exchange to be open during times when
price-sensitive data is released from the U.S. Department of
Agriculture. The traders were not able to pinpoint how the rumor
had started.
These data include the weekly crop progress report issued on
Monday to weekly export sales numbers on Thursday that are
released outside of current CBOT trading hours.
“At CME Group, we regularly engage with industry
participants to discuss ways to enhance our markets. We will
keep our customers and industry participants abreast of any
planned changes, but have nothing formal to announce at this
time,” CME spokesman Chris Grams said in an e-mail.
CBOT grain futures currently trade electronically on the
exchange’s Globex platform from 6 p.m. to 7:15 a.m. Central
time, while side-by-side trade on Globex and the open-outcry
pits runs from 9:30 a.m. to 1:15 p.m.
CME Group last widened its trading hours in grains in 2009,
expanding the early Globex session to 7:15 a.m., from 6 a.m.
previously. The CME’s New York Mercantile Exchange (NYMEX)
already trades nearly around-the-clock.
Any change in hours would appear aimed at fending off
competition from the upstart IntercontinentalExchange Inc
, which earlier this month announced plans to launch five
grain and oilseed futures contracts in mid-May.
ICE said its contracts will trade 22 hours a day, from 8
p.m. to 6 p.m. Eastern Time.
Grain analysts said the launch of the ICE contracts would
pressure CME to either match its trading hours, or risk losing
business when market-moving news occurs outside of CME’s trading
schedule.
The weekly U.S. crop progress updates, which are released at
3 p.m. Central time on Mondays between April and November, can
often impact the grain markets when CME electronic trade resumes
three hours later.
“Especially when we get into (crop) ratings and we are
hanging on every percentage change in the ratings on a weekly
basis — I question whether the CME is going to remain closed
and let ICE drain off all that volume,” said Rich Feltes, vice
president for research with R.J. O’Brien.
“I don’t think this is about either exchange caring about
how long peoples’ trading days are. This is about competition
and holding market share, and maximizing return to
shareholders,” Feltes said.
