CHICAGO (Reuters) - The U.S. Department of Agriculture on Wednesday said it will shift the release time for major crop reports to 12 p.m. Eastern Time (ET), starting in January, from the current time of 8:30 a.m. ET.
The move marks the first change in release time of USDA reports since 1994.
The new release time applies to USDA’s monthly U.S. Crop Production report and its companion report on crops around the globe, the World Agricultural Supply and Demand Estimates; the quarterly Grain Stocks report, issued in March, June, September and January; the Prospective Plantings report in March, the Acreage report in June and the Small Grains Summary in September.
The time for livestock reports, currently released at 3 p.m. Eastern, will not change.
The grain reports are closely monitored by the global grains trade. CME Group (CME.O), parent of the Chicago Board of Trade, told USDA in a letter in July that CME would move the start time for its open-outcry grain trading back to 9:30 a.m. Central on report days if USDA started issuing crop reports between 10 a.m. and noon Central.
CME did not immediately respond to a request for comment on Wednesday.
JOE BEDORE, CBOT FLOOR MANAGER, INTL-FC STONE:
“We’re elated, the whole trading floor is just elated with this decision. The early release time just wasn’t working.”
“I don’t think it makes a whole lot of difference from what they’ve recently been doing. We’re still faced with the release during the trading session.... Probably USDA employees are the winner. The lock-up guys are probably not going to have to be there all night now.”
RICH FELTES, VICE PRESIDENT OF RESEARCH FOR R.J. O’BRIEN:
“This only leaves three hours to trade the numbers. I would have preferred that they come out a little earlier in the morning. It’s a move in the right direction, but I’m a little surprised that they moved it to so late in the day.
“On crop report days, the first four or five hours that people are at their desks, it’s going to be a pretty slow morning. Most of the people that I talked to in the industry were pushing for a 10:00 (a.m.) Eastern release.
“Certainly, this is not going to be popular with European traders who are going to be staying later. It’s certainly a boon for the West Coast traders.”
“From a traders’ standpoint, you are still going to have to react on the fly. They are saying that it (releasing reports during market hours) has not caused a huge disruption in the price discovery and so we will stick with it, but we will move it to an hour that is more comfortable for the U.S. traders and the world can still participate too.”
“They are trying to capture as much as of the trade reaction during market hours for the CME so as not to miss any contracts traded.
“The fact that the ICE exchange (ICE.N) extended its hours to 22 hours a day and put trade into the time frame around the original times of the crop reports created a problem for the Merc.
“They should have gone to the CFTC and said, ‘OK, here’s the problem, fix this.’ ... Now the USDA has agreed to release the reports at 11 a.m. (Central time), when everybody is on the floor trading.
“What they are missing is that it doesn’t give the trade time to analyze the report, and create trade that is lasting. The Merc does not care because we are no longer driven by price discovery.”
“I do not see that being any different than releasing them the way they were. You are going to see the reaction 3-1/2 hours later than what we did before is all. This really does not accomplish anything at all. The open outcry will probably go back to opening at 9:30 a.m. on report days, but as far as trade reaction and how the reports get traded, I do not think you will see much difference.”
“What they’re doing is looking at the U.S. users of the data and, with us trading from coast to coast, this will improve the timing of the release across the country. That’s the only thing I could really see changing anything.
“We’ll still be seeing the report in the session. Before when we were releasing it at 7:30 a.m. (Central) and we weren’t starting to trade until 9:30 — even if you didn’t see the release at 7:30, you could get in and take a look (before trading started). That must not have been an overall concern.”
“The USDA announcement of a noon Eastern time release of major U.S. crop production and stocks reports is consistent with comments submitted by the NGFA recommending that such reports be made public at a time of day when futures liquidity is deepest, thus helping to minimize any potential added volatility.”
“The NGFA also has recommended a pause in futures trading around report releases in order to allow equal access of all market participants to report data and to allow for a rational analysis of the data. We look forward to continuing that discussion with futures exchanges, regulators and other stakeholders.”
“The change will affect us as cattle traders because on days when there is going to be a major grain report, we’ll tend to lighten up our positions about 15 minutes before the data is released as we currently do.
“You don’t want to get stuck with a big long or short position in any of the deferred cattle and hog markets and have the report come out and hurt your positions.
“Feeder cattle are more directly impacted by the sharp moves in corn because it affects their input costs versus what they sell their cattle for to packers.”
Reporting by Mike Hirtzer, Julie Ingwersen, Sam Nelson, Karl Plume, Tom Polansek, Theopolis Waters and Mark Weinraub; editing by Jim Marshall and Marguerita Choy