NFU President Roger Johnson sent a letter to Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler on Thursday urging the chairman to establish a 30-day public comment period to discuss the extension of electronic commodity trading up to 22 hours per day.
“The decision of the Intercontinental Exchange (ICE) and CME Group to expand trading to 22 hours per day has alarmed numerous NFU members, many of whom are involved in the cash grains market,” said Johnson. “Many have concerns about the volatile price swings that occur when U.S. Department of Agriculture reports are released. Additionally, expanded trading creates uncertainty regarding the availability of accurate and updated bids from grain purchasers after the open outcry trading day has closed with an established settlement price but electronic markets remain open. These are very reasonable concerns that must be answered.”
The electronic market currently trades for 17 hours each day. The expanded trading would allow for nearly-around-the-clock trading, often for those without a commercial interest in the market, while doing little to benefit farmers and ranchers.
“The public, especially farmers and others with an interest in fair and functional markets, would be well-served if the CFTC were to allow for further dialog,” said Johnson. “Given these concerns, along with the very recent introduction of a 21-hour trading day by CME Group at the end of the most recent CFTC review period, NFU asks that a 30-day comment period be opened. Stakeholders in the grain and oilseeds markets need further opportunity to understand and provide input about the proposed changes.”