The president of the CME Group says they will investigate ways to reduce volatility in the cattle futures market.
Speaking to a standing room only crowd at a meeting of the National Cattlemen’s Beef Association’s (NCBA) Cattle Marketing Committee in San Diego, Terry Duffy said the CME understands their concerns and will look for solutions. Duffy told Brownfield that could include a return to shorter trading hours.
“I think the volatility could be mitigated to some extent—outside of the fundamental reasons—if, in fact, you had more volume being traded in a shorter period of time,” Duffy says. “And I think coming up with a unique concept like circuit breakers, like they have in the U.S. equity markets, would also add to alleviating some of the volatility and give people an opportunity to pause and rethink the market over a period of time—say three to five minutes.”
AUDIO: Terry Duffy
Missouri cattleman and Marketing Committee member Clint Berry of Gainesville, Missouri said he likes the idea of adding circuit breakers to the cattle futures.
“Absolutely, I think that’s a step that would really make a difference. And monitoring the messaging, that’s going to be part of it. They’re going to implement that on Monday,” Berry says. “So they’re proactively looking for ways to make their market better for us.”
Berry says he was pleased that Duffy made the effort to meet with cattlemen and that he promised to continue the dialogue with NCBA.
AUDIO: Clint Berry