April 4, 2019
CFTC, KSU Announce AgCon2019 Agenda
Second Agricultural Commodity Futures Conference Convening
April 11-12 in Kansas
Washington, DC — The Commodity Futures Trading Commission (CFTC) and the Center for Risk Management Education and Research (CRMER) at Kansas State University (KSU) announced the agenda for AgCon2019. The second Agricultural Commodity Futures Conference, hosted by CFTC and CRMER, will convene April 11-12, 2019 in Overland Park, Kansas.
AgCon2019 will include robust presentations and discussions from leading academic researchers, as well as distinguished voices from the private and governmental sectors. Panels and participants will explore a range of current questions and topics facing the agricultural futures markets.
CFTC Chairman J. Christopher Giancarlo and KSU President Richard B. Myers will open the conference. They will be followed by a roundtable featuring CFTC Commissioners Brian Quintenz, Rostin Behnam, Dawn D. Stump and Dan Berkovitz.
Program highlights include a keynote from Ambassador Gregg Doud, Chief Agricultural Negotiator, Office of the U.S. Trade Representative. Former CFTC Commissioners Michael Dunn and Jim Newsome will moderate two panels.
CRMER Director and KSU Professor Ted Schroeder will share information about CRMER, and CFTC Kansas City Regional Administrator and Division of Enforcement Deputy Director Chuck Marvine will provide enforcement insight in his presentation, “How Does the CFTC Catch Bad Guys?”
Getting Your Fill: Futures Trading Matching Algorithms – Alternatives, How They Function, and Effect on Market Performance
In pit trading, brokers are able to match orders through face-to-face interactions. An electronic-trading environment, however, requires a set of rules that governs the hierarchy for matching buy orders (bids) with sell orders (offers) for the purpose of trade execution. Much debate has surfaced about the way that matching algorithms could potentially impact individual market participants, as well as overall market performance. This session will focus on reviewing the current structures for matching algorithms employed by major exchanges, how different orders are prioritized and filled, how the design of the matching algorithms may impact trade fills across-the-board or for certain segments of the market, and the ways in which matching algorithms may impact overall market performance and efficiency.
Back to Basis: Grain and Oilseed Futures Convergence – Storage-Rate Structure, Delivery Methods, and Delivery Accessibility
Prevailing economic theory suggests that adjustments to futures contract-embedded storage rates are a potential remedy for a lack of convergence. The Chicago Board of Trade’s Soft Red Winter (SRW) Wheat and KC Hard Red Winter Wheat (KC HRW) futures contracts employ a variable storage rate, while recent adjustments to the Chicago Board of Trade’s Corn and Soybeans (as well as Soybean Meal and Oil) futures contracts will implement higher fixed storage rates. This session will analyze the effectiveness of variable versus fixed storage rates, the unintended consequences of each method, and their role in addressing convergence between cash and futures prices in SRW, KC HRW, the Soy complex, and Corn. This session also will explore the current structure of the delivery process and procedures and whether that plays a part in enhancing convergence.
Known Unknowns: Futures Markets’ Responses to Scheduled Market Reports – Release Timing, Access, Timeouts, and Market Reactions
Commodity futures traders often eagerly anticipate the release of scheduled market reports. Because these reports contain information about market fundamentals, they can immediately and significantly affect futures prices. This session will examine how the release of scheduled market reports impacts price discovery and market performance—focusing on the U.S. Department of Agriculture’s 2018 changes to its procedures for the release of crop and livestock reports from the National Agricultural Statistics Service and the World Agricultural Outlook Board, which changes were designed to ensure that all members of the public have access to the information at the same time. This session also will examine how algorithmic traders trade futures in response to macroeconomic news releases and whether electronic and algorithmic trading have led to an increase in volatility around the release of scheduled market reports.
Unknown Unknowns: Futures Markets’ Responses to Significant News Events
Markets are constantly absorbing information as part of the price-discovery process, and there is often debate about whether markets are overreacting or whether volatility is “excessive.” Exchanges have several tools at their disposal to curb volatility that is considered excessive—including price limits, stop logic, and trading halts—each of which has intended and unintended consequences. This session will look into “lock limit” moves (including assessments of volatility, liquidity, trade volume, and established market limits); the relationships between futures, options, and cash markets during “lock limit” moves; and other tools at the exchanges’ disposal for dealing with extreme volatility. In addition, this session will explore how markets performed when certain recent news events occurred (including Presidential tweets) and provide visualizations that will allow the audience to better understand what happened in agricultural futures markets in and around significant news events.
Hot Topics: Risk Management Across the Dairy, Pork, and Energy Sectors
Listen to experts from the dairy, pork, and energy sectors discuss how they manage risk in a world of ever-changing challenges—from international trade disputes to multiple regulators to massive amounts of data, and everything in between. In exploring similarities and differences between risk management in the dairy, pork, and energy sectors, this panel will discuss issues and ways to manage risk that will resonate with audience members from all industries. Additionally, this panel will examine where the next challenges are likely to come from and what research needs to be done to be in the best position to address those challenges.
See full agenda with moderators, panelists and registration information at AgCon2019.