Last year the CME Group made some major changes to trading hours for agricultural commodities when they extended electronic trading hours to a total of 21 hours a day. Late last year Tim Andriesen told HAT that first change gave traders greater access to the markets.
“We are always listening to our customers in terms of hours and what we think is the right mix for them. Changes in these markets, you know there’s always pluses and minuses. The plus of this I think for most people is having greater access to the market. In the past you had to wait until 9:30 to do something and now you can execute earlier in the morning. So we think that’s probably a plus for the producer.”
Now after customer feedback and a formal survey of market participants CME Group has made the decision to reduce trading hours for grain and oilseed futures and options contracts. CME Group says more specifics will be released in the coming weeks after deciding what the exact reduced hours should be. There is also an indication that CME Group supports a market pause during the release of USDA reports. Such a pause would allow for evaluation of report data.
Andriesen is Managing Director of Agricultural Commodities and Alternative Investments. CME Group offered two new options products in the last year so producers can get protection for specific windows or specific events at a lower cost.
“One is we now offer weekly options and they are exactly what they sound like. They’re an option that has from 3 or 4 to week’s worth of life and as you would imagine that makes them much less expensive. Where we’ve seen people use them is where there is report coming out or a weather event coming out and they want some sort of short term protection. So they may have their position where they want it but they’re concerned that something will happen.”
Another very new product is called short-dated new crop options which allow the producer to buy protection that expires in months other than November.
With short-dated new crop options we now have options that expire in April, expire in June, and expire in August. So you may say all I really need is protection from now until getting the crop in or from now through pollination.”
To really learn futures and options Andriesen says CME always encourages the producer to partner with a good broker.[audio:https://www.hoosieragtoday.com//wp-content/uploads//2013/02/more-changes-at-CME-Group-.mp3|titles=more changes at CME Group]