CME to Review Livestock Trading Hours

By Jacob Bunge 

CME Group Inc. plans to review trading hours for its benchmark livestock futures contracts, a spokesman said Wednesday.

CME has contacted some customers of its futures markets to discuss potential changes to the current trading session, after some have cited high volatility in the market and, at-times, sporadic trading activity.

"Livestock customers and industry participants have asked us to review existing livestock trading hours to ensure we are providing the most effective risk-management and price-discovery tools possible and that they continue to reflect the changing needs of our customers and the market," said Chris Grams, spokesman for CME, in an email. "We are beginning that process based on customer feedback."

CME, the world's largest futures exchange operator in terms of trading activity, maintains the main U.S. market for trading contracts reflecting anticipated prices for cattle and hogs.

The main trading session for those contracts, which includes trading in CME's Chicago-based pits, runs from 10:05 a.m. ET to 2 p.m. ET. Contracts can be traded electronically nearly around the clock, from the time markets open on Monday mornings to 4:55 p.m. ET Friday afternoons, with one-hour breaks each day in the late afternoon.

The rise of electronic trading has prompted CME and other exchanges to rethink trading sessions that used to revolve around various industries' business days. CME, which also runs the main U.S. market for trading grain and soybean contracts, last year trimmed the session for those contracts after customers objected to CME's move in 2012 to extend the trading day.

Activity in CME's livestock futures markets increased 7.6% in June, with about 2.2 million cattle and hog futures contracts traded, according to exchange data. Overall activity in the markets over the first six months of this year is running slightly behind the same period in 2013.

Any change to CME's existing livestock sessions would require approval from the Commodity Futures Trading Commission.

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