CME aims to curb volatility in cattle markets

by MEAT+POULTRY Staff
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SAN DIEGO – Starting Feb. 1, 2016, livestock contracts will be added to the CME Globex Messaging Efficiency Program, a system that caps the number of order updates traders can send depending on the number of trades actually executed, according to published news reports. CME Group Inc. made the move in response to concerns in the cattle industry about price volatility in the cattle futures market. 

Terrence A. Duffy, CME
Terrence Duffy, chairman of CME Group

CME Chairman Terrence Duffy announced the change during the National Cattlemen’s Beef Association’s 2016 Cattle Industry Convention and NCBA Trade Show recently held in San Diego.

NCBA detailed its concerns about the impact of high-frequency trading on livestock futures. In a Jan. 13 letter to Duffy, the association requested reforms such as limits on messaging for livestock contracts; a one-second delay between trade actions; and more action regarding “spoofing,” an illegal practice in which an investor makes a buy order and then immediately cancels the order without filling it.

In other NCBA news, Tracey Brunner, a Ramona, Kansas, cattle producer, was elected to succeed Philip Ellis as NCBA president. The convention wrapped up Jan. 30. More than 6,700 people attended the event.

“It’s an honor to take the reins of NCBA for the next year,” Brunner said in a statement. “We have a great organization and the strong presence of cattlemen and women gathered this week is a demonstration of several things: The interest we have in improving our businesses, our desire to have fun and fellowship, our belief in the power of dialog to move things forward and our commitment to making this an even greater industry.”

Craig Uden of Elwood, Nebraska, was elected NCBA president-elect, and Keven Kester of Parkfield, California, is the new NCBA vice president. Steve Hanson, Elsie, Nebraska, was elected chairman of the NCBA Federation Division, and Jerry Effertz, Velva, North Dakota, is the new Federation vice chairman. The new NCBA Policy Division chairman is Jennifer Houston of Sweetwater, Tennessee and Joe Guild, Reno, Nevada, is the new policy vice chairman.

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