April 29, 2013 / 9:01 PM / in 5 years

UPDATE 2-ICE trims U.S. grain trading hours, follows CME cut

By Tom Polansek

CHICAGO, April 29 (Reuters) - IntercontinentalExchange said on Monday that it will reduce its electronic U.S. grain trading hours in response to customer feedback, following in the footsteps of arch-rival CME Group.

ICE launched grain trading on a 22-hour basis a year ago, mounting the biggest challenge yet to CME’s cornerstone agricultural markets. In response, CME, owner of the Chicago Board of Trade, increased trading to 21 hours from 17 hours.

However, neither exchange was able to generate enough interest in around-the-clock activity.

Starting May 13, trading at ICE will begin the week at 5 p.m. central time on Sunday and run to 1:30 p.m. central time on Monday, according to a notice from the exchange. For the rest of the work week, markets for crops like corn, wheat and soy will trade from 7 p.m. until 1:30 p.m central, the notice said.

The markets currently close at 5 p.m. central five days a week.

A spokeswoman for ICE declined to comment beyond the notice.

The reduction was a “rational move” by ICE because volume was not strong enough to justify a nearly non-stop trading day, said Alan Brugler, president of Brugler Marketing & Management.

Traders largely kept their business at CME after ICE launched its electronic markets because the CME’s markets were more liquid.

However, traders complained the longer cycle hurt CME’s markets by spreading out volume. Earlier this month, CME reduced its grain trading cycle to 17.5 hours, with the markets closing at 1:15 p.m. central time.

The shortened schedules mean trading at both exchanges will remain active when the U.S. Department of Agriculture issues key crop reports, which often cause sharp swings in grain prices.

Prior to ICE’s launch, U.S. grain markets were closed for two hours after the USDA issued monthly reports, giving traders and farmers around the world time to leisurely review the data.

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