* Pit trading will settle at 2 p.m. Central
* Change synchronizes closes of pit, electronic trading
* Early start to pit trading expected on USDA report days
By Tom Polansek
CHICAGO, June 8 (Reuters) - CME Group said on Friday it will add 45 minutes to the open-outcry trading day for its Chicago Board of Trade grain markets, synchronizing the close with that of electronic trading following complaints from farmers and grain elevator managers.
CME, owner of the CBOT, said starting on June 25 pit trading of grain and oilseed futures and options will close at 2 p.m. Central time (CDT 1900 GMT/CST 2000 GMT) Monday to Friday, instead the current 1:15 p.m. close.
The change, contingent upon approval from the Commodity Futures Trading Commission, is the latest in a string of adjustments to the trading cycle by CME following new competition from rival IntercontinentalExchange.
Also, the CME on Friday distributed a notice on the CBOT floor announcing in big letters that open-outcry trading will begin at 7:20 a.m. (1220 GMT) on Tuesday, when the government is slated to issue crop reports at 7:30 a.m. (1230 GMT). In smaller letters, the CME said that the change from the normal 9:30 a.m. opening was pending CFTC approval.
Market participants had lobbied CME to implement a later settlement time for open-outcry trading after the exchange last month pushed back the close of electronic trading to 2 p.m. from 1:15 p.m. as part of a move to nearly non-stop trading.
Following the increase in electronic hours, farmers and grain elevator managers said it was difficult to know what price to use to set cash grain prices at the end of the day.
"That just causes confusion and heart burn for producers who are seeing two different prices for their grain," said Todd Kemp, vice president of marketing and treasurer for the National Grain and Feed Association, the country's largest grain group.
CME expanded the electronic trading cycle to 21 hours per session from 17 hours last month after ICE challenged its iron grip on the grain markets by launching look alike electronically traded corn, wheat and soy contracts on a 22-hour basis.
Floor traders and grain groups objected to the increase because they said the CME, which dominates agricultural markets, did not consult with industry members. They worried the longer trading session would increase volatility by keeping markets open for the first time when the USDA issues monthly crop reports that often cause sharp swings in prices.
Options traders on the CBOT floor, who are responsible for much of the volume in grain and soy options, also complained they would miss out on business if electronic trading was open when the USDA reports are issued and the pits were closed.
In response, CME said it would start open-outcry trading early on days that the USDA issues crop reports.
The Kansas City Board of Trade, a wheat exchange that uses CME's electronic trading platform, said it will change its pit settlement to 2 p.m. from 1:15 and that open-outcry trading will begin at 7:20 a.m. on USDA report days starting on Tuesday.
The CFTC conducted a 10-day review of CME's plan to start open-outcry trading early on crop report days.
A CFTC spokesman had no comment, and a CME spokesman did not reply to a request for comment.
The early start to pit trading could be a stop-gap measure for the exchanges as the USDA will likely push back the time that crop reports are released until later in the day, the department's chief economist said.