RJ O’Brien calls for delay in longer CME grain trading


Tue May 15, 2012 10:36am EDT

* Brokerage backs grain groups in seeking delay

* Groups want 30-day comment period on longer hours

* O’Brien also wants markets shut during US crop reports

CHICAGO, May 15 (Reuters) – Citing “grave concerns” from its
customers, futures broker R.J. O’Brien on Tuesday joined top
U.S. grain groups calling for a delay to the start of nearly
around-the-clock grain trading by CME Group.

The largest independent U.S. futures brokerage said in a
statement t hat while longer hours could ultimately benefit the
markets, it supported a push for a 30-day comment period on
CME’s plan to increase weekday trading for grain and soy futures
and options to 22 hours from 17 hours.

The delay will provide “additional time for public comment
and industry response,” it said.

CME is slated to start its longer hours on May 21, and a
10-day review of its plan by the Commodity Futures Trading
Commission will end on Wednesday.

An effort to postpone the start of the extended trading
hours was fueled by the National Grain and Feed Association and
North American Grain Export Association.

The planned shift to 22-hour trading at CME’s Chicago Board
of Trade, which dominates agricultural markets, has become a
contentious issue among grain traders as it will keep markets
open during key U.S. Department of Agriculture crop reports that
often cause sharp swings in prices.

R.J. O’Brien urged CME and rival IntercontinentalExchange
, which launched new grain and soy contracts on Monday in
a 22-hour trading cycle, to keep markets shut for two hours
after the reports are released.

A pause in trading from 7:15 a.m. to 9:30 a.m. Central time
on days that reports are released “would give market
participants adequate time to receive and analyze the
comprehensive global reports, without producing unnecessary
volatility and exaggerated price moves,” R.J. O’Brien Chairman
and Chief Executive Gerald Corcoran said.

The markets currently are closed for 15 minutes before and
two hours after monthly USDA crop reports are issued at 7:30
a.m. Central.

“Our commercial customers and introducing brokers have grave
concerns about the impact of trading straight through the
release of the reports,” Corcoran said.

Once traders are prepared for the longer grain cycle,
extended trading hours should benefit the markets, he said.
“Electronic trading around the clock has greatly broadened
participation in the markets and facilitated stronger risk
management opportunities,” he pointed out.

Article source: http://www.reuters.com/article/2012/05/15/rjobrien-grain-trading-idUSL1E8GF4RX20120515

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6 movies to watch at the Cannes Film Festival

CANNES, France (AP) — In a Cannes lineup packed with veteran auteurs — Michael Haneke, Abbas Kiarostami, Alain Resnais — and relative newcomers like Lee Daniels and Andrew Dominik, here are six films to watch out for among the 22 contenders for the coveted Palme d’Or:

THE ANGELS’ SHARE

Britain’s master of gritty realism, Ken Loach, won the Palme in 2006 with Irish war drama “The Wind That Shakes the Barley.” He found a lighter vein with “Looking for Eric” in 2009, and looks set to continue the high spirits with this tale of unemployed Glaswegians who seek salvation through distilling single malt whisky.

KILLING THEM SOFTLY

A meaty-sounding crime thriller from New Zealand-born director Andrew Dominik stars Brad Pitt as a mob enforcer trying to recover a stolen poker stash. Dominik made the Australian shocker “Chopper” and directed Pitt in “The Assassination of Jesse James by the Coward Robert Ford.”

ON THE ROAD

One of the longest-awaited and most anticipated films in competition sees Brazilian director Walter Salles (“The Motorcycle Diaries”) tackle Jack Kerouac’s impressionistic Beat Generation travelogue. The central triangle of tangled free spirits features young actors Sam Riley (“Control”) and Garett Hedlund (“Tron: Legacy”) alongside “Twilight” star Kristen Stewart.

COSMOPOLIS

The auteur of creeping horror, David Cronenberg, adapts Don DeLillo’s novel about a Wall Street billionaire seeking a haircut and trying to fend off ruin on an epic journey across Manhattan. The somewhat surprising star is Robert Pattinson, vampire heartthrob of the “Twilight” films.

RUST AND BONE

French director Jacques Audiard stormed Cannes three years ago with his powerful prison drama “A Prophet.” His follow-up is set on the sunny French Riviera but promises pathos in the tale of a poor single father and a killer whale trainer who suffers a devastating workplace accident.

AFTER THE BATTLE

Probably the most topical film in competition, Yousry Nasrallah’s drama is set against the backdrop of last year’s Egyptian revolution and looks at the relationship between a poverty-stricken former Mubarak regime enforcer and a wealthy revolutionary divorcee.

Copyright © 2012 The Associated Press. All rights reserved.

Article source: http://www.google.com/hostednews/ap/article/ALeqM5hekACGYpzQFIj8II4NN-jDfEO9Nw?docId=35d6fa0a6d8b4e9c82ca991e25cecacb

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Wheat growers to get pay

AUSTRALIAN grain growers owed wheat payments from Iraq dating back to the 1980s could soon start receiving payments.

Corporate advisory firm Ferrier Hodgson has written to 52,000 growers about potential payments for wheat sold between 1987 and 1990 by the Australian Wheat Board and AWB International.

John Mikhael of Ferrier Hodgson said there had been a big response to the $US50 million pool of funds, even though distributions would be staggered through to 2028. ”A lot of the growers have taken it as a bit of a surprise,” Mr Mikhael said. ”We’re going back 25 years, so a lot has changed since then.”

Iraq defaulted on a $US480 million debt owed to the Australian Wheat Board in 1990.

About 80 per cent of the debt was recovered by the government’s Export Finance Insurance Corporation. Ferrier Hodgson is working on behalf of Agrium Asia Pacific International (AAPI), the new name of AWB International, to pay back the remaining 20 per cent.

”It is expected that approximately $US50 million will be received from Iraq by AAPI over the next 17 years to 2028, through six-monthly payments of approximately $US1.5 million,” Ferrier Hodgson said. The first distribution is expected to occur in the middle of 2012.

Article source: http://www.brisbanetimes.com.au/business/wheat-growers-to-get-pay-20120514-1yn0e.html

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American livestock get extra dose of antibiotics from spent ethanol grain, report says

As the battle wages on over the safety of feeding antibiotics to livestock for growth promotion, a new report reveals yet another source of unregulated antibiotics in American animal feed–spent ethanol grain.

The new report by advocacy group the Institute for Agriculture and Trade Policy suggests that a relatively new source of food for livestock may contain levels of penicillin, erythromycin and other antibiotics. Both of these are medically important drugs whose effectiveness in treating humans can be compromised by overuse in animal feed for non-sick animals. 

When the Food and Drug Administration discovered the antibiotic residues in the grain in 2008, it started requiring ethanol/distiller grain producers to get approval for their presence as a food additive. But the IATP report claims that the antibiotic companies are skirting this rule by relying on their self affirmed GRAS status as approval enough. GRAS (generally recognized as safe) approval requires only that a company proves to itself that its product is safe. It can voluntarily report those findings to the FDA as well.

The FDA did not respond immediately to requests for comment on the report.

But on Friday Senators Edward J. Markey (D-Mass) and Louise Slaughter (D-NY) sent a letter to the FDA asking what it would do to better regulate these residues and why it has not released more information about its 2008 findings of antibiotic residue in half of the spent grain tested.

Charles Staff of the Distillers Grain Technical Council took issue with the report, however, saying that it conflated concern over the use of antibiotics added directly to animal feed with the “far far lower levels” in distillers grain.

“We are talking about parts per billion that is potentially present,” Staff said, adding that levels of antibiotics in distillers grain have dropped significantly since the 2008 FDA analysis. “We are talking about minuscule levels and you can see that in the later 2010 samples taken by the FDA. [Ethanol producers] have better control and the antibiotic companies have established technical service and people who go out out to the ethanol plants and monitor how they are using it.”  

As government programs have aggressively funded and promoted the proliferation of ethanol in the last decade, production of this grain byproduct (known as DGS) jumped by 1,264 percent, from 2.5 to 34.1 million metric tons per year from 2000 to 2010, according to the report.

Many ranchers and ethanol enthusiasts often point to its use as a selling point for the efficiency of ethanol production.

According to the IATP report “The beef industry uses 41 percent of all DGS, the dairy industry consumes 26 percent, 5 percent are fed to swine and 4 percent to poultry; 22 percent are exported for use by meat producers overseas.

“DGS have rapidly become a mainstay of the conventional livestock diet, replacing 914 million bushels of traditional corn feed in the 2010-11 production year.”

Antibiotics are used in the production of ethanol to reduce the development of bacteria during the distilling process. But not all distillers use antibiotics, opting instead for antimicrobial methods that do not leave possible antibiotic residue in the grain. 

 

Article source: http://www.chicagotribune.com/features/food/stew/chi-ethanol-distillers-grain-may-contain-antibiotic-residues-20120514,0,3717062.story

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How barley domesticated its clock

3c0e3 433px Hordeum barley How barley domesticated its clockMost organisms that live on or near the surface of the Earth or its oceans have evolved a circadian clock – a daily timer of all biochemical, physiological and behavioral functions.

Daily cycle of light and darkness in the environment is a selective factor – having an internal clock is an adaptation that allows organisms to predict and prepare for instead of passively react to cyclical changes in the environment. The regularity of the light-dark cycle is usually a good predictor for other (perhaps not as precise) cycles of temperature, availability of food, or activity of predators.

ResearchBlogging.orgIt gets trickier for organisms that live in places where the light-dark cycle may be missing for big chunks of the year (the polar regions), or where light-dark cycle is not a good predictor of other relevant events in the environment (e.g,. cannot predict rain in very arid regions), or where light cannot penetrate at all (deep ocean, caves, underground burrows). In such organisms the clock may get uncoupled from some of its functions, e.g., it may still time biochemical but not behavioral events. Or the clock may be temporarily or permanently turned off.

Even animals that constantly live in caves still tend to have functioning circadian clocks even if they are not used by these animals to drive rhythms in behavior. In animals that regularly travel into and out of the caves, like bats, the clock is robust.

A number of organisms have been studied in which the clock may temporarily be turned off. In the chestnut tree , circadian clock stops in winter. In reindeer in the high Northern latitudes, behavioral rhythms (and underlying clock) work only during the short springs and autumns, not during the long polar winters and summers. In social insects, castes that spend their time inside the hive and need to work around the clock also do not have a functioning circadian clock.

The organisms that live in extreme environments tend to be difficult to study. It may be a harsh environment for the human researchers to spend long periods of time in. The organisms may not be easy to bring into the lab to study under controlled conditions. Most of such organisms are far from being standard “laboratory models” which means that little is known about their genetics, biochemistry, physiology and behavior.

Thus, one is limited in choices as to which rhythms to study and what conclusions one can take from such studies. A limited number of overt rhythms can be easily monitored in a standardized manner even in the laboratory. A record of overall physical activity and movement is usually made. Additional measured rhythms may be daily fluctuations in hormones, e.g., melatonin. And tissue samples may be taken over a 24-hour period for analysis of patterns of expression of core clock genes.

This approach may miss stuff. For example, even if there is no cycling of clock genes or overt behavioral rhythms, this does not mean that the clock may not be working anyway – cytoplasmatic cellular clocks, or ensembles of neural cells producing weak rhythms, or hormonal feedback loops between endocrine glands could still be producing daily cycles in some aspects of metabolism not identified by the researchers. The adaptive function of the clock is so strong, if nothing else for coordinating internal events, that is is difficult to persuasively and definitively demonstrate that absolutely nothing in the body cycles around a 24-hours cycle.

An important function of the clock is also in measuring changes in daylength – days get longer in spring and shorter during fall. Even environments that have no daily cycles for a while, or no utility in using light-dark cycles, may have strong seasonality, and seasons are another important aspect of the environment related to time. Most organisms use their circadian clocks to measure the changes in daylength through a mechanism called photoperiodism. So even organisms that have no use for daily clocks, may still retain them for their higher-level function of fine-tuning the annual calendar of events.

Domestication also has an effect on circadian clock as one can argue that the lab and the farm are “extreme environments” in some sense. It is well known that many domesticated strains of laboratory mice, rats and nematodes have lost seasonality. Most of our domesticated animals have vastly prolonged breeding seasons – sometimes spanning the entire year, or adding a Fall season to the existing Spring one  – compared to their wild relatives. Domestication may be a strong selective force for abandoning seasonality, which reduces the need for a functional circadian clock as well, especially if human care – feeding, defense, etc. – replace the need for the organism to fend for itself in sync with the cycles of nature.

Now a new player is entering this line of research – barley (Hordeum vulgare). Last week, Faure et al, published an open access paper in PNAS showing that strains of barley from Northern Europe have mutations in one of their photoperiodic genes – EARLY MATURITY8 (EAM8) – and that this gene greatly reduces the amplitude of expression of the core circadian clock genes.

As a result, northern varieties of barley can start flowering early and fast in the season, completely ignoring daylength, just following the normal developmental program. At the same time the disrupted clock allows for much longer daily activity of photosynthesis during long summer days, as it does not shut it down before darkness arrives in the evening.

One can imagine how such mutants were prized in the earlier history of the domestication. As humans moved more and more north, only the barley that could be harvested early and produced large yields was valuable. Late harvest may have been too late: humans may have already moved on, driven by hunger, and left the field to be harvested by birds. Or the harvest, being so small and late, would have been used only for consumption (winter is coming – time to brew some beer!) and not for seed for the next year.

Plant circadian clocks are very complex at the molecular level, involving several different feedback loops in expression, some operating in the morning, others in the evening, etc. Importantly, some of the genes involved in photoperiodism and flowering are intricately connected to the clock and may be a part of some of the clock feedback loops. Most of the past research focused on the way clock genes regulate flowering genes. This is an unusual paper in that it discovers the opposite direction – how a gene involved in flowering feeds back on the clock genes and regulates the way the clock works.

What is exciting about this work is that barley is not a difficult organism to do research on. One does not need heroic efforts or expensive Arctic or speleological gear to study it – it is a domesticated plant, easily grown in fields, glasshouses and labs. Furthermore, much of its biology is already well known, including the similarity between its genes and those of Arabidopsis thaliana, the standard model for plant research.

As a number of strains of barley exist, some southern some northern, there is plenty of material to do comparative studies to figure out exactly which genes and processes were involved in the process of domestication – what was selected for as the humans took their crops with them on their northward migrations. This makes barley potentially a useful standard laboratory model for the general studies of evolution under domestication.

Reference:

Faure, S., Turner, A.S., Gruszka, D., Christodoulou, V., Davis, S.J., von Korff, M. Laurie, D.A. Mutation at the circadian clock gene EARLY MATURITY 8 adapts domesticated barley (Hordeum vulgare) to short growing seasons, Proceedings of the National Academy of Sciences, DOI: 10.1073/pnas.1120496109

Related at Scientific American:

Chestnut Tree Circadian Clock Stops In Winter
Evolutionary Medicine: Does reindeer have a circadian stop-watch instead of a clock?
Domestication – it’s a matter of time (always is for me, that’s my ‘hammer’ for all nails)
Why social insects do not suffer from ill effects of rotating and night shift work?
Clock Evolution
Whence Clocks?
Circadian clock without DNA–History and the power of metaphor
Basics: Biological Clock
Clock Classics: It All Started with the Plants

Image: Wikimedia Commons, public domain.

Article source: http://blogs.scientificamerican.com/a-blog-around-the-clock/2012/05/14/how-barley-domesticated-its-clock/

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Va. wheat forecast predicts a 5 percent increase

RICHMOND, Va. (AP) — Virginia‘s 2012 wheat forecast predicts a 5 percent increase over last year’s yield.

The Virginia field office of the National Agriculture Statistics Service is forecasting a wheat crop totaling 18.5 million bushels. If that holds up, production will be up 810,000 bushels from 2011.

Producers are expected to devote nearly 300,000 acres to wheat with a yield of 64 bushels per acre. That is above the national yield by more than 16 bushels an acre.

As of early May, the majority of Virginia’s wheat crop is in fair to good condition.

Article source: http://news.yahoo.com/va-wheat-forecast-predicts-5-percent-increase-151721128--finance.html

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Is the Punjab grain problem man made?

Video

4a7c3 grey Is the Punjab grain problem man made?
4a7c3 grain rot jyotikmlpkg 271x181 Is the Punjab grain problem man made?89839 ply botton2 Is the Punjab grain problem man made?Click to play video

Chandigarh: It is not just a shortage of storage space that is the problem. In Punjab, investigations by CNN-IBN reveal that space to store seven lakh tonnes of wheat grain has already been created by private godown owners and another five lakh tonnes space would be created in the next three months.

However, the Punjab government is not using the new godowns and has left its grain out in the open to rot. CNN-IBN has also found that rotten grain is in fact being sold at half the procurement price to liquor distilleries.

Punjab Deputy Chief Minister Sukhbir Singh Badal’s wife Harsimrat Kaur had told Parliament that Punjab had no grain storage space whereas new godowns are going unused in Punjab.

One Rajinder Singh built a storage facility at a cost of Rs 3 crore after getting a tender from the Punjab government in 2011. He informed them in March that the facility was ready, but the government is still procuring grain and allowing it to rot in the open. An inspection team citing “technical” issues is yet to give clearance to Rajinder’s godowns.

To stop the great grain rot in Punjab, the Food Corporation and the Punjab government launched a scheme in 2008, inviting private parties to build 47 lakh tonnes of storage, of which the rent would be paid by the FCI while the inspection and take-over of godowns would be done by Punjab government agency PUNGRAIN.

By March 2012, seven lakh tonnes of storage space had been built by private players. But PUNGRAIN is yet to take over these godowns, even as grain in Punjab rots in the open.

The local food inspector merely cites technical reasons.

“Till such time that we don’t get clearance, how can we keep the grain in the new godowns?” said Gopal Bansal, food inspector.

PUNGRAIN officials refused to comment, even as unhappy godown owners allege favoritism in the godown approval process.

Kulwant Rai Singla, a godown owner, said, “It is a big scam and should be investigated.”

And there is another shocker – rotting paddy at the Khamano grain market. Workers tell CNN-IBN that the rotting rice is now being siphoned off to the liquor industry.

“Not even cattle feed can be made from this paddy, it’s so bad. I t can be used for making liquor,” said Malkit Singh, worker, Khamano Grain Market.

Guidelines say that grain unfit for humans can only be sold as cattle feed or as fuel. But the Punjab government says no rotting rice has gone to the liquor industry.

The opposition alleges vested interests allow the grain to rot for the liquor lobby to buy at throwaway prices.

Grain paid for by the common man’s money is rotting away in Punjab government facilities even as warehouses lie empty. And the rotten grain is now making its way to the liquor industry flourishing in Punjab. This raises questions over Punjab government’s intentions to really save the grain from rotting.

Article source: http://ibnlive.in.com/news/is-punjab-grain-problem-man-made/256335-3.html

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Barley Takes a Leaf out of Reindeer’s Book in Land of Midnight Sun

Researchers have found a genetic mutation in some Scandinavian barley varieties that disrupts the circadian clock that barley from southern regions use to time their growing season.

Just as reindeer have dropped the clock in adapting to extremely long days, so has Scandinavian barley to grow successfully in that region’s short growing season. This new knowledge may be useful in efforts to adapt crops for regions where the growing season is short.

The timing of when a plant flowers during the year is crucial to its overall survival and fitness, and in crop plants it has major affects on the overall yield. Barley’s wild ancestors and modern winter barley varieties germinate in the autumn, but don’t flower until after winter has finished. One stimulus that triggers flowering is the longer days that come with spring.

To know how long the day is, the plant uses its built in circadian clock, with which they time a 24 hour period. Circadian clocks are found throughout the plant and animal kingdom, and affect all manner of processes such as when animals eat and sleep, or when plants photosynthesize. As anyone who has suffered jet lag knows, anything that disrupts the circadian clock of an organism causes big problems, which is why when researchers from the John Innes Centre and the Max Planck Institute sought to characterize Scandinavian barley varieties, they were surprised to find a mutant gene that knocked out the circadian clock and its functions.

The research, published in the Proceedings of the National Academy of Sciences, shows that by disrupting the circadian clock Scandinavian barley varieties flower independently of the length of the day. This means that they flower much earlier than their southern counterparts and so can fit their growth cycle into the shorter growing season.

Our knowledge of plant development and genetics would suggest that there are ways of encouraging early flowering without affecting the circadian clock, so why was a clock mutant selected?

In the UK and much of Western Europe cold winters and warm wet summers favored the development of barleys which didn’t need the period of overwintering and could be planted in the spring. A late flowering mutation in another gene called Photoperiod-1 allowed barley to be planted in the spring and use the long days of summer to build up its yield, without its growing season being shortened by the high temperatures experienced by its ancestors from the south. This gene was also identified at the John Innes Centre, which is strategically funded by the Biotechnology and Biological Sciences Research Council (BBSRC).

As barley cultivation moved north this late flowering background became unsuitable for the short growing season in Scandinavia as the plants couldn’t achieve good yields before temperatures plunged. This was overcome by introducing a second mutation that removes the influence of the circadian clock, making the barley plants insensitive to day length and allowing earlier flowering.

Alternatively, the mutation may combine early flowering with additional useful side effects such as turning off the circadian control of photosynthesis. This could help Scandinavian barley exploit the 20 hours of sunlight during the day. This physiological explanation has an intriguing parallel in animals. Reindeer have similarly evolved to switch off their circadian clock, abandoning the more regimented lifestyle of their antelope ancestors to be able to display more opportunistic behavior.

Plant breeders and scientists now have the tools and knowledge of genetics to rationally design crops to be best adapted to specific regions, and this study adds to the growing wealth of genetic data on cereal crops. Whilst the mutation identified here would be useless for UK barleys that benefit from late flowering, it could be very useful for breeding varieties to take advantage of new environments or changing climate. Crops have a wide distribution all over the world, representing a rich source of genetic variation and adaptation, which modern plant science is now exploring to help develop better crops and protect food security.

Article source: http://english.farsnews.com/newstext.php?nn=9102111768

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Asia Grains-Philippines buys feed wheat, corn prices to fall

* Philippines feed makers buy 55,000 T feed wheat

* Market sees lower S.American corn prices in Asia

* Buyers slow purchases on hopes of ample corn supply

* S.Korea buys corn, Taiwanese mills take U.S. wheat

By Naveen Thukral

SINGAPORE, May 11 (Reuters) – Feed millers in the
Philippines bought around 55,000 tonnes of Australian feed wheat
this week for shipment in August and September, while most
importers slowed corn purchases on hopes of ample global
supplies.

South American corn values in the Asian market are expected
to fall after the benchmark U.S. futures slid to a 14-month low
on Thursday after the agriculture department forecast stocks of
the grain would climb this autumn to their highest in seven
years.

Australian feed wheat to millers in the Philippines was sold
at $270 a tonne, including cost and freight (CF), which some
traders said was at least $10 lower than the market prices.

“It was sold cheap, the freight plus the current FoB price
should work around to around $280 to $285 a tonne,” one
Singapore based trader said.

The millers initially intended to buy 105,000 tonnes but
could not get many offers for July shipment with a lack of
capacity to take new orders at busy Australian ports, traders
said.

Asian grain importers have slowed purchases as feed grain
prices are expected to drop, in sympathy with the U.S. market.

Argentine corn, which was quoted around $300 a tonne, CF,
in Southeast Asia before the Thursday’s report, could come down
to around $290 to $295 a tonne.

“The premiums really depend on farmer selling and how tight
the supply is,” said another Singapore trader who supplies South
American corn to mills in Asia. “Prices of Argentine corn should
come down by at least $5 to $10 a tonne.”

Chicago Board Of Trade July corn has lost more than 5
percent so far this week, the biggest loss since mid-January,
while July soybeans are down more than 2 percent, falling
for a second straight week. July wheat has given up 1.5 percent
this week after losing more than 6 percent last week.

The U.S. Department of Agriculture’s first estimates for
this year’s harvest and next year’s demand showed domestic corn
stocks will surge from a near record low to a seven-year high by
September 2013, aided by expected record yields as farmers
sprinted to plant an early crop.

South Korea’s Korea Feed Association bought 55,000 tonnes of
optional-origin No. 3 yellow corn via a tender on Thursday at
$271.40 per tonne, CF, while Major Feedmill Group bought 70,000
tonnes of corn from Japan’s Mitsui at $272.99 a tonne.

The Taiwan Flour Millers’ Association bought 48,700 tonnes
of milling wheat to be sourced from the United States in a
tender for the same volume which closed on Thursday.

This week, U.S. soft white wheat was quoted around $285 a
tonne, CF, in the Asian market, while hard red winter wheat
with 11.5 percent protein was being priced around $310 a tonne.
The spring wheat was offered around $370 a tonne.

Article source: http://finance.yahoo.com/news/asia-grains-philippines-buys-feed-074927240.html

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UPDATE 2-US grain groups urge CFTC to delay expanded grains trading


Thu May 10, 2012 7:11pm EDT

* Grain groups want 30-day public comment on longer trading

* ICE slated to start 22-hour trading on Monday

* Groups worry about USDA issuing data during active trading

By Tom Polansek

CHICAGO, May 10 (Reuters) – The top U.S. grain groups called
for federal regulators to delay the start of nearly
around-the-clock grain trading at CME Group and rival
IntercontinentalExchange just days before the scheduled
launches.

In a joint statement on Thursday, the National Grain and
Feed Association and the North American Export Grain Association
said “inadequate advance consideration” of how the longer
trading days will affect market participants justified
intervention by regulators at the Commodity Futures Trading
Commission.

The groups urged the CFTC to institute a 30-day public
comment period on planned moves to 22-hour trading at both
exchanges.

“Neither the ICE contracts nor the CME Group’s plan to
expand electronic trading hours were vetted properly with
appropriate market participants,” the grain groups’ statement
said.

A CFTC spokesman said he did not immediately know how the
commission would respond.

The planned shift to 22-hour trading days has become the
most contentious issue among grain traders as it will keep
markets open during key U.S. government crop reports that often
cause sharp swings in futures prices.

Traditional market participants, including grain elevators
and farmers, fear they will suffer a competitive disadvantage to
larger traders who can access and trade on U.S. Department of
Agriculture data more quickly.

CME, which dominates agricultural markets with its benchmark
Chicago Board of Trade contracts, announced on May 1 that it
would increase weekday trading for grain and oilseed futures and
options to 22 hours a day as of May 14.

The CFTC later forced the massive exchange-operator to delay
the start date by a week because it had not given regulators
adequate notice of the change.

CME’s decision to expand trading hours with two-weeks notice
was widely seen as a response to a threat from Atlanta-based
ICE. ICE said last month it would challenge CME’s iron grip on
grains markets by listing look-alike wheat, corn and soy
contracts on May 14 — on a 22-hour basis.

ICE PUSHES AHEAD

ICE, which announced its challenge to CME on April 12, said
it would push ahead with the plan to launch grain and soy
contracts on Monday with 22-hour trading.

ICE is expanding in the grain markets as many farmers remain
wary of the futures industry following the failure of brokerage
MF Global last fall.

CME was a regulator of the brokerage, and former MF Global
clients, including many growers and grain elevators, are still
missing an estimated $1.6 billion that was held in accounts at
the firm when it collapsed.

Responding to the grain groups on Thursday, CME said it
understood the longer trading cycle represented “a significant
change for industry participants” and would support a 30-day
comment period, as long as it was applied to all futures
exchanges.

A spokesman did not immediately have a comment about why CME
originally wanted to implement the change in two weeks.

CME had previously told regulators there were “no
substantive opposing views” to its plan to expand grains
trading.

A major concern among the grain groups is the release of
USDA crop data during active trading.

It would be prudent to keep the markets shut when crop
reports are released, or to implement a break in trading
activity when data are released, the grain groups said, arguing
that participants need a chance to analyze information and
adjust their market positions before trading resumes.

“Trading through the release of these reports could lead to
extreme volatility immediately following their release,” the
groups said. “Further, there is currently unequal access to
USDA report data because of different Internet connection speeds
and analysis capabilities.”

The USDA previously said it was studying whether it needed
to adjust the time that reports are released because of the
planned increase in trading hours.

Article source: http://www.reuters.com/article/2012/05/10/grains-cftc-idUSL1E8GAIMC20120510

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