CHICAGO, June 4 (Reuters) - Commodities brokerage Newedge is closing its grains desk on the floor of the Chicago Board of Trade, a company spokeswoman said, the latest firm to depart the once-bustling open-outcry pits as the industry increasingly shifts to electronic screen trading.
French bank Societe Generale took full ownership of Newedge in May, buying out a 50 percent stake held by Credit Agricole, highlighting at the time Newedge’s prime brokerage and clearing services as a key to its acquisition.
Floor brokers have been losing market share to computerized trading for years. The Globex electronic platform, owned by CBOT parent CME Group, handles about 95 percent of volume in grain futures on a typical day.
“These departures were expected and in no way affects our ability to serve clients. Newedge remains one of the world’s largest commodity brokers and we are committed to the business of our commodity customers,” a Newedge spokeswoman said.
She declined to comment on the number of departures.
Only a few Newedge brokers remained on the grain trading floor on Wednesday, clad in the firm’s signature black and green trading jackets. One of the traders, who asked not to be named, said they were winding down operations and would vacate their desks in the next week or two.
An email to a Newedge broker was returned with an automatically generated message stating he would be out of the office from May 30 to January 1, 2018.
A Newedge customer said he had received a text message informing him that the Newedge “grain execution team” had left the company.
Some trade sources said the Newedge brokers’ contract expired at the end of May and that it was unable to reach a renewal agreement.
The core of the group was in discussions with rival brokerage Jefferies Bache, the sources said, requesting anonymity. At least 14 new desks on the grains trading floor have been set up by Jefferies since last week, they said.
A Jefferies spokesman declined to comment. (Reporting by Karl Plume and Julie Ingwersen in Chicago, Maya Nikolaeva in Paris)