--USDA to release crop reports at noon EDT instead of 8:30
a.m.
--Move follows shift in exchange trading hours
--Allows for greatest liquidity, access, USDA says
--USDA will maintain prereport "lockup" period
(Adds details, background on change in paragraphs five-six and
nine-14.)
By Ian Berry and Bill Tomson
The U.S. Department of Agriculture plans to start releasing its
closely watched monthly crop reports at midday in response to
expanded trading hours for grain futures, the agency said
Wednesday.
The reports, which estimate the supply and demand for corn,
soybeans and other major commodities, will be issued at noon ET
starting in January, instead of the current 8:30 a.m. ET release
time.
The move follows an expansion of futures trading hours earlier
this year. CME Group Inc. (CME), the world's largest grain futures
exchange, in June expanded futures trading to 21 hours a day, up
from 17, in reaction to newly created grain futures contracts by
rival IntercontinentalExchange Inc. (ICE).
The expanded trading hours have meant that the USDA's monthly
supply and demand reports, which can trigger significant market
moves, were for the first time being released while markets were
active.
The reports will continue to be released during trading hours,
but proponents of the change said the new time is a sweet spot when
the market is most active.
Even with the 21-hour electronic trading schedule, traders say
volumes rise when open outcry, or floor trading, starts at 10:30
a.m. ET each day.
"The shift to a noon release allows for the greatest liquidity
in the markets, provides the greatest access to the reports during
working hours in the United States, and continues equal access to
data among all parties," USDA Chief Economist Joe Glauber said in a
statement Wednesday.
The new release time will also affect other closely watched crop
reports, such as quarterly grain stock reports and production
reports that come out several times a year.
The USDA solicited public comments on possible changes to the
report release times in June, and received 147 comments. Some large
industry groups, including CME, the Commodity Markets Council and
grain-industry associations, requested the agency move the report
times to 11 a.m. ET or noon.
"We believe it is critical that if reports are released when the
markets are open that there is as much liquidity as possible to
absorb the impact of any changes," Kathleen Cronin, CME senior
managing director, said in a letter to the USDA this summer. "We
would suggest sometime during the window of 10 a.m to 12 p.m.
CT."
Commodity Markets Council President Christine Cochran said in a
letter that a late-morning release would accommodate traders on the
U.S. west coast, who currently have to wake up before dawn for the
reports, as well as in Europe. The council is a trade group for
futures exchanges and brokerages.
Many of the people who submitted comments to the USDA said the
reports should be released when the market isn't trading, to give
market participants a chance to digest the report.
Opponents of the expanded trading schedule, including some
farmers, have said releasing reports while the market is open gives
an unfair advantage to large trading firms that can process
information from the report and execute trades more quickly.
Some who filed comments said the crop reports should be released
when the market closes at 3 p.m. ET.
The USDA said it won't change the time of livestock reports,
which are currently released at 3 p.m. ET.
A USDA official said the agency will continue to have a "lockup"
period before the grain reports, when financial newswires reporters
can access the reports and compile data to be published at the
official release time.
Closely held Cargill Inc., one of the world's biggest commodity
traders, had asked the USDA during the public-comment period to
abolish the lockup, arguing that the company should have access to
the report numbers at the same time as the news media.
Write to Bill Tomson at bill.tomson@dowjones.com and Ian Berry
at ian.berry@dowjones.com
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