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USDA ponders pushing back grain reports to mid-morning-source
May 24, 2012 / 11:40 PM / 5 years ago

USDA ponders pushing back grain reports to mid-morning-source

* USDA plans 30-day comment period on data releases

* Chief economist met with grain leaders

* Crop reports could move to “mid to late morning”-source

By Tom Polansek and Charles Abbott

CHICAGO/WASHINGTON, May 24 (Reuters) - The U.S. Department of Agriculture is considering pushing back the release time for its market-sensitive crop reports to mid- or late-morning, during the height of Chicago trade to possibly minimize market volatility, according to an industry official who met with the agency on Thursday.

As the USDA considers whether to adjust its reporting schedule after the CME launched nearly round-the-clock trade this week, USDA Chief Economist Joe Glauber told representatives of major U.S. agricultural trade groups on Thursday that the agency would soon open a 30-day comment period to seek public opinion on such an adjustment.

After the CME announced its plan to move to a continuous 21-hour trading day earlier this month, some traders and farmers feared the exchange may be stoking volatility and favoring computer-driven traders by keeping markets open when the USDA issues many of its key reports at 7:30 a.m. Central (1330 GMT). Until this week, CME’s electronic trading was shut from 7:15 a.m. until floor trade begins at 9:30 a.m.

But that view may now be shifting, with some dealers now angling for a mid-morning release that would coincide with the current open-outcry trading session -- a period when liquidity is at its peak, potentially helping dampen volatility. Trading volume in the early morning has been negligible this week.

“The impression was they were very amenable to moving it back to mid- to late-morning,” said one attendee, who declined to be named because the meeting was not public, about the USDA.

The USDA declined to comment on specifics of the meeting.

The meeting, with groups including the American Farm Bureau Federation, National Corn Growers Association and Commodity Markets Council, addressed the time of day that crop production, planting and supply/demand reports should be released.

The department is “trying to get lots of input” from the agricultural industry after the recent start of nearly around-the-clock trading, said Dana Peterson, chief executive of the National Association of Wheat Growers, who attended the meeting.

The 30-day comment period will be announced within a few days, she said, adding that farmers appreciate that USDA is trying to make a decision in “a deliberate and well planned-out fashion.”

The change will not occur before the next monthly supply and demand report on June 12, two attendees said.

CME, owner of the Chicago Board of Trade, increased its electronic trading day to 21 hours from 17 hours on Monday, a week after archrival IntercontinentalExchange launched its own lookalike and near round-the-clock grain and oilseed contracts.

Traders are still adjusting to the change. Thursday’s weekly export sales was the first set of USDA data to have an impact on the market during the new morning trading period, which robs traders of the two-hour break in which they can review data.

Some have asked USDA to adjust its schedule so crop reports are issued when markets are closed in the afternoon.

Some CBOT floor options traders said they would like the USDA to release reports at 10 a.m. CDT.

Open-outcry futures and options pits are currently open from 9:30 a.m. to 1:15 p.m. CDT, although the CME now appears set to expand the hours for open-outcry dealing so that pits would open in time for the 7:30 a.m. crop reports.

Traders expected CME on Thursday to seek regulatory approval to open the pits at 7:20 a.m. The Commodity Futures Trading Commission did not have a filing from CME listed late on Thursday, although an exchange spokesman said CME had filed one.

The USDA also will ask the public for comments about electronic access to its reports, as some farmers and grain elevators managers are worried they will face a competitive disadvantage because they have slower Internet connections to download the data than large traders, meeting attendees said.

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