New trading hours in the Chicago Board of Trade (CBOT) and Kansas City Board of Trade (KCBT) are expected to improve liquidity and market performance.
Liquidity allows soybean traders to move in and out of markets more freely.
And with fewer trading hours, the volume of buyers and sellers will be more highly concentrated.
Beginning April 8, trading hours in the CBOT grain and oilseed and KCBT wheat markets were reduced from 21 hours to 17.5 hours.
More than 4,000 farmers, commercial customers, traders and other industry participants who manage risk in these markets weighed in on the change before it was made to determine what best met their needs.
“There were concerns that liquidity and market performance were adversely affected by the longer trading hours,” said Dave Lehman, managing director of commodity research and product development of CME Group, which is the exchange operator that administrates the CBOT and KCBT.
“By shortening the hours, we’re helping with some of the business practices of the industry. Trading will be more concentrated, which will make the market more liquid and efficient during the hours that it’s open.”
According to CME Group, electronic and floor trading hours for CBOT and KCBT, plus all related CBOT and KCBT calendar spread options and inter-commodity spread options, will be amended as follows:
• Sunday to Friday, electronic trading from 7:00 p.m. to 7:45 a.m. CT;
• Monday to Friday, break in electronic trading from 7:45 a.m. to 8:30 a.m. CT;
• Monday to Friday, floor and CME Globex trading from 8:30 a.m. to 1:15 p.m. CT.
“These are the world benchmark contracts for corn, soybeans and wheat that trade here in Chicago,” says Lehman. “We believe these hours provide soybean traders access to the global marketplace during their key times of day.”