Grain traders in Chicago and beyond breathed easier on Tuesday morning after the world's premier market for corn, wheat and soybean futures weathered its first trading session with the "live" release of a major federal crop report.
Heading into Tuesday's trade, big farm groups had feared a surge in volatility that could favor lightning-fast hedge funds over farmers after the CME Group extended the trading cycle at its Chicago Board of Trade to overlap the U.S. Department of Agriculture's key early morning reports.
Analysts long accustomed to a two-hour break between overnight trade and CBOT floor dealing fretted that they couldn't offer sound advice.
Even technologically sophisticated players had back-up plans: Citigroup's commodities team sent four commercial brokers down to the floor before the report came out, hours earlier than normal, positioning them to place complicated trades in person.
"Just in case things go wrong," said Terry Reilly, a senior agricultural futures analyst at Citigroup.
For weeks, grain brokers, traders and marketers have been honing spreadsheets and trying to calm clients about the U.S. Department of Agriculture's all-important monthly report coming out at 7:30 a.m. Central time (8: 30 a.m. EDT, 1230 GMT) -- the first release ever during active trading of Chicago futures.
It helped, say brokers, that Tuesday's report held little news to rile the market. After its release, corn prices whipped briefly higher, then tumbled, trading in a 25-cent range, about a 4 percent swing. Within four minutes the market had found its footing, with prices marginally lower.
Wheat and soybeans reacted similarly, but then drifted lower, pressured more by rain forecasts than U.S. data.
About 6,400 lots of July corn changed hands in the five minutes following the report, about equal to the busiest periods of floor trading in recent months -- although much less than during the most frenetic USDA report days, when trades would remain pent up until the 9:30 a.m. CDT (10: 30 a.m. EDT, 1430 GMT) open.
CRASHING OR NOT
Before the world's premier grains exchange moved to nearly around-the-clock trading last month, farmers, brokers and traders everywhere had a full two hours to parse thousands of USDA data points while trading was halted.
On Tuesday, nerves ran high. If grain markets went "haywire" following the U.S. government's latest crop report, some agricultural industry heavyweights said they were prepared to call Congress before they called their brokers.