(Adds comments from analyst, trader sources and gives trading
CHICAGO, July 15 The Chicago Mercantile Exchange
has started a review of electronic trading hours in its cattle
and hog contracts, it said on Tuesday, and trade sources said
talks have focused on reducing hours to keep the contracts
Scaling back activity on the world's biggest platform for
trading cattle and hog futures would concentrate volumes, which
should calm market volatility. Contracts currently see wide
swings in price after open-outcry trading has closed.
"We're in the early stages ... we're beginning the process
of conducting a review based on customer feedback," said CME
spokesman Chris Grams in an email. He did not elaborate.
Currently, live cattle, lean hogs and feeder cattle
electronic trade for futures contracts only closes from 4 p.m.
to 5 p.m. CDT (2100-2200 GMT) from Monday to Thursday. On
Friday, the trading stops at 1:55 p.m. CDT and resumes on Monday
at 9:05 a.m CDT.
Open outcry trading runs from 9:05 a.m. to 1 p.m. CDT from
Monday to Friday.
"I am assuming they will send out a survey soon. It will
probably be something like open at 8:30 a.m., close at 4 p.m.,
open for a couple hours at night," said a trader who had heard
about the talks from customers and a CME board member.
Another trader, who also asked not to be identified, said he
had heard a recent meeting with major players and the exchange
had discussed making the hours similar to those for the lumber
Last month, the exchange cut CME lumber futures and options
trading to 11 hours per session from 23 hours on some days.
Hours could be cut to 9 a.m. to 4 p.m. CDT and then 5 p.m.
to 9 p.m. CDT, this second source said, or possibly an opening
at 8:30 a.m. CDT in line with grains contracts.
"I don't think we need the long hours that we are trading
because we're not as globally traded as the grain markets," said
Chicago-based JBS Trading president James Burns.
"There is a fair amount of volatility in the markets for no
explained reason, and I can see where people can be fed up with
that," he added.
On Monday, 41,322 lean hog futures contracts traded
electronically and 8,932 in open outcry. If electronic trading
hours were cut, the volumes would then be concentrated in a
shorter time frame, which would increase liquidity.
(Reporting by Theopolis Waters and Tom Polansek; Editing by
Matthew Lewis and Diane Craft)