For the past couple of weeks, wheat futures have been trading electronically 21 hours a day at the CME Group and the K.C.B.T., with a trading day beginning at 5:00 p.m. on the previous day and ending at 2:00 p.m. But open-outcry trading at both exchanges continued to run from 9:30 a.m. to 1:15 p.m., which meant electronic trading for the day continued another 45 minutes after open outcry closed.
This created some confusion for producers, elevators and flour sales personnel. They confronted official exchange settlement prices that reflected levels at the end of open-outcry session at 1:15 p.m. that varied from where wheat futures actually were priced at the conclusion of all trading for the day, at 2:00 p.m.
The K.C.B.T. notice to the C.F.T.C. said, in part, “Market participants have expressed the desire to have identical closing times for electronic and open outcry venues. Wheat option floor- traders have expressed concern about electronically traded options being able to trade until 2:00 p.m. on the last trading day whereas options traded by open outcry are only able to trade until 1:15 p.m. We believe the 2:00 p.m. close for open outcry will alleviate this concern.”
The recently implemented 21-hour electronic trading day also was perceived to put open-outcry traders at a disadvantage in that electronic traders would be able to trade on information contained in critical U.S. Department of Agriculture reports typically issued at 8:30 a.m. Central time, when open-outcry pits were closed. The exchanges recently filed notices with the C.F.T.C. of their intent to begin open-outcry trading at 7:20 a.m. on days when the U.S.D.A. issues such reports, beginning with the June 12 reports.
Meanwhile, the U.S.D.A. was accepting comments on whether it should change the time it releases its reports. Joseph Glauber, the U.S.D.A. chief economist, told Reuters he thought it may make sense, given the 21-hour schedule for electronic trading, for the U.S.D.A. to shift the time it releases its reports until a time during the day when both electronic trading and open-outcry trading are under way. Mr. Glauber said it did not seem to make sense for the U.S.D.A. to “chase” a release time when both electronic trading and open-outcry trading were not under way.