* R.J. O'Brien sought delay of USDA crop report
* R.J. O'Brien says delay would reduce price volatility
* CME denies rumors of seeking to delay USDA report
* USDA monthly report scheduled for Wednesday
By K.T. Arasu and Christopher Doering
CHICAGO/WASHINGTON, Nov 7 The U.S. government
brushed aside on Monday a petition by broker R.J. O'Brien to
delay its monthly crop report, saying the agriculture
department would stick to its schedule for the data monitored
not only in the United States but around the world.
R.J. O'Brien wanted the report updating U.S. crop
production and stocks to be delayed to Monday to reduce price
volatility at a time when accounts from bankrupt MF Global were
being moved to new brokerages including to R.J. O'Brien.
"It makes sense," said grains analyst Dan Basse of
AgResource Co. in Chicago about the USDA's decision to keep to
its schedule. "There is a lot of interest from outside the
country. We need to understand that this report is important to
just more than the CME," he said of the Chicago exchange.
R.J. O'Brien Chief Executive Gerald Corcoran asked
Agriculture Secretary Tom Vilsack in a letter to delay the
report until Monday, saying price gyrations on days USDA
reports were released were "well documented."
"This recommendation is intended to reduce price volatility
until MF Global client transfers to their designated FCMs are
fully operation and thus better equipped to manage risk
triggered by changes in the USDA's supply/demand updates,"
Corcoran said in the letter made available to Reuters.
There had been widespread rumors earlier in the day that
the Chicago Mercantile Exchange had sought the delay.
But CME spokesman Chris Grams denied the rumors.
"I can confirm that at this stage, CME group has not asked
the USDA to move the crop report," he told Reuters.
He declined to say if the CME supported the R.J. O'Brien
RUMORS TIED TO MF GLOBAL
The rumors were tied to the MF Global meltdown at a
time when about 50,000 commodity accounts from the bankrupt
broker were being transferred to a handful of brokerages.
The process of shifting the accounts has been advancing
without any major hitches, but there have been some anecdotes
of customers being expected to liquidate some of their
positions as they were unable to pay additional margins.
The USDA report on Wednesday will update the department's
estimate of corn and soybean production and ending stocks in
the United States.
Corcoran said there had been precedent for the USDA
delaying its crop reports, citing blizzards shutting down U.S.
He said the delay would allow farmers, end-users, commodity
trading advisers and other market participants more time to
properly fund MF Global accounts transferred to new brokers.
"The situation is exacerbated by the limited funds that the
MFG bankruptcy trustee has released to each client's designated
FCM (Futures Commission Merchant)," Corcoran said.
About 40 percent of the collateral in MF Global accounts
have been retained, causing many account holders moving to new
brokers to come up with additional margins.
Corcoran said the delay would also allow thousands of
transferred MF Global customers to adapt to new order entry
platforms as well as access to option orders executed in the
CME trading pits.