CBOT glitch takes shine off new electronic grain trade
(Reuters) — Electronic trading of grains at the Chicago Board of Trade was halted for 90 minutes on Tuesday by a technical glitch, giving the fast-growing platform a black eye after the second outage in about two months, traders said.
The CBOT launched daytime e-trading of agricultural futures such as corn, soybeans and wheat on Aug. 1, and daily volume has been growing rapidly.
But Tuesday's halt of trade on the platform, seen by many as eventually supplanting the traditional open-outcry "pit" trading system, was seen by traders as a setback.
"I think it set the e-cbot back a notch," Linn Group analyst Roy Huckabay said. "It's not mature yet. It's going to have problems."
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It was the second outage in the CBOT's electronic system since the exchange launched daytime e-trade of its agricultural contracts in August. The system went down on Aug. 4 for 2-1/2 hours.
The CBOT's open-outcry pits remained open on Tuesday and absorbed some of the business from the electronic market, traders said.
"The electronic trading system didn't open until 11 (a.m.), so that shifted some business to the floor," said Vic Lespinasse, broker with A.G. Edwards.
"There were some people who were upset. It's been slow electronically so far today. I think people are little wary," Lespinasse said.
Huckabay said the outage may have accelerated early declines in the grain markets, especially in CBOT corn, as traders scrambled to sell futures in the open-outcry market after realizing their sell orders on the electronic system went unfilled.
CBOT December corn settled 3-3/4 cents lower on Tuesday at $2.64 per bushel after trading as low at $2.61-3/4.
Volume in CBOT agricultural futures has boomed in the two months since the launch of daytime electronic trade. Total volume at the 158-year-old exchange was up 18 percent in September, with the agricultural trade climbing 68 percent from a year ago.
Of the total grain futures volume in September, 32 percent was traded electronically -- up from 18 percent in August. Pit futures volume in September was up 24 percent from last year.
Tuesday's outage also halted electronic trade at the Kansas City Board of Trade, the Minneapolis Grain Exchange and the Winnipeg Commodity Exchange. Trade resumed at those exchanges shortly after 11 a.m. CDT. |
