Market Matters Blog

Okay, readers. This song is getting old. Seriously old.

"This is the song that never ends..."

Cue the dancing lamb puppet.

"It just goes on and on my friends."

Yes, you heard me, the song goes on. CME is revising its grain trading hours once again. It will pare them back, but haven't settled on any new times yet. And when they do, they need to get CFTC approval.

Last week, CME Group announced they were formally surveying customers about grain trading hours. Right after the market close this afternoon, CME Group leaders Terry Duffy and Phupinder Gill sent a letter to their customers saying the feedback made it clear they needed to adjust hours once again.

CME's leaders also expressed a willingness to consider a trading halt around report releases if other exchange and trading venues do the same. The full text of the letter is below.

There's still time to let CME know what grain trading hours you would prefer by taking their survey, which will be active through the end of January. www.cmegroup.com/agsurvey

1/29/2013

To Our Customers,

At CME Group, we are committed to the integrity of our deep and liquid grain markets, and listen intently to feedback from all of our customers. We regret that recent comments in press reports this week were not representative of that commitment.

Since implementing extended trading hours in May of 2012, we’ve received significant customer feedback from a broad cross-section of market participants, including through a formal survey we implemented last week. Though our survey is still underway, we have enough of your responses to be able to decide to reduce trading hours for our grain and oilseed markets, pending CFTC approval. However, as there were varying opinions on what the reduced hours should be, we are continuing to vet alternatives with our customer base. We will be communicating more specifics on the revised hours in the coming weeks.

In addition, with respect to market pauses during USDA reports, CME Group understands the frustration of many of our customers, and we are open to considering a market pause allowing participants to evaluate the data if all exchanges and trading venues would do the same. We would support a halt, as long as it was unified for all venues, as that would best benefit all customers by ensuring the necessary market liquidity needed for effective price discovery during this time.

We recognize the importance of this issue, and we take customer feedback seriously. Our entire organization will continue to work with all of you and other industry participants to ensure efficient markets going forward.

Sincerely,

Terry Duffy

Phupinder Gill

(ES/CZ)

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