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CME expanding hours of grain-contract trading

Updated: July 1, 2012 12:22PM

The owner of the Chicago futures markets said Friday it will immediately implement expanded hours for trading of grain contracts, overriding objections of some that the move will make prices more volatile.

CME Group Inc. said the new schedule will take effect Sunday night for Monday’s business. It calls for trading in corn, soybeans, wheat, oats, ethanol and other agricultural contracts to be available electronically all hours except 2 p.m. to 5 p.m.

The owner of the Chicago Mercantile Exchange and the Chicago Board of Trade took action swiftly once federal regulators approved the new hours. CME is trying to defend its market share in grain trading from the insurgent IntercontinentalExchange Inc., which has started almost around-the-clock trading in the products.

The CME grain markets currently are open 17 hours a day. But a controversial part of the change calls for trading to be open throughout mornings when Agriculture Department crop estimates are issued.

The widely followed monthly reports come out at 7:30 a.m. Currently, there is no trading in the grains complex from 7:15 a.m. until 9:30 a.m.

Matthew Rees, executive vice president of the futures brokerage R.J. O’Brien & Associates, said the two-hour delay helps all traders digest the reports. Eliminating it could cause more price swings as high-frequency trading firms seize on information before others have it, he said.

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