CHICAGO (Reuters) — CME Group, the world’s largest futures markets operator, had to shut electronic trading in some agricultural contracts on Tuesday because of technical issues and reverted to old-fashioned open outcry to decide closing prices.
The shutdown occurred when traders were squaring their positions on the day before the release of U.S. monthly grains stocks data on Wednesday. The electronic system handles around 95 percent of volumes on a typical trading day and the shutdown prompted a rush to the trading floor, known as the open outcry pits, by traders who normally do business from offices at the exchange.
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“Think of how much volume there is on the screen. To have that stifled, 15 minutes before the close, the day before a crop report — there was a logjam. It was like trying to put on a stage show with no planning. There was no time to set it up,” a wheat options trader said.
CME spokesman Chris Grams said the problem was fixed after the close.
The U.S. Department of Agriculture is also due to publish its first report on wheat conditions on Tuesday, after delaying from Monday.
“The local traders came out of the woodwork to facilitate orders,” said Chess Obermeier, a broker in the corn options pit. “The floor took it on and traded it.”
Obermeier said the electronic halt was the longest in recent memory.
CME listed contracts affected on its website.
The CME has just won a court case giving it the right to use electronic trades, as well as open outcry business in calculating end-of-day prices.
The exchange will fall back on using only the centuries-old floor trading of contracts affected for these settlement prices on Tuesday.
Oils and metals trading was not affected, CME said.
“I’d love to say it’s not a big deal, but it’s the benchmark for grain prices around the world,” said Ken Smithmier, who trades the grain markets electronically.
“For the traders, you just can’t sit there and let sleeping dogs lie,” he said. “You have to try to find out what’s going on.”
The outage comes after a spate of disruptions in trading at other venues last year.
The Chicago Board Options Exchange had to shut down for a half day in April 2013 because of a problem connected to expanding its trading hours. In August, Nasdaq OMX Group suffered a three-hour disruption.
CME Group had built up a “bank account of goodwill” among investors and traders because of its reliable markets, said Brad Hintz, analyst for Bernstein Research.
“These guys were famous in terms of keeping the lights on and being boringly good,” he said. “Everybody gets one mistake. You just don’t want to see continuing mistakes.”
