Key facts
- The National Grain and Feed Association (NGFA) submitted comments to the Commodity Futures Trading Commission (CFTC).
- NGFA urged the CFTC to carefully consider the implications of 24/7 trading for agricultural energy futures.
- The association also advised against the introduction of perpetual futures contracts for these commodities.
- NGFA stated that market changes should not negatively impact risk management or commercial hedging capabilities.
- The group believes continuous trading hours could pose risks to commercial hedgers, as cash markets do not operate around the clock.
- NGFA supports physically delivered futures contracts as the most effective mechanism for price convergence.
The National Grain and Feed Association (NGFA) has formally submitted comments to the Commodity Futures Trading Commission (CFTC), expressing concerns over proposed changes to agricultural energy futures markets. Specifically, the NGFA is urging the commission to proceed with caution regarding the potential extension of trading hours to 24/7 and the introduction of perpetual futures contracts.
In its filing, the NGFA emphasized that while market innovation can be beneficial, any alterations to market structure must not compromise effective risk management, market integrity, or the ability of commercial firms to hedge their price risks. NGFA President and CEO Mike Seyfert stated that NGFA members rely on physically delivered futures contracts to manage risk in grain, oilseed, and agricultural energy markets, and that the current structure has effectively promoted convergence between cash and futures prices.