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Electronic cotton trading at NYBOT

Jun 15, 2007 10:16 AM, By Elton Robinson
Farm Press Editorial Staff

Almost 40 percent of cotton futures are traded electronically these days. How does this impact you as a cotton producer and marketer? You can find out more about this sweeping trend and more at the Cotton Forum in New York City, July 12-13.

The event will begin with an orientation at NYBOT on Thursday, July 12. According to Tim Barry, vice president of marketing for NYBOT, the orientation will provide producers a close up view of how the exchange operates as well as a primer on the advent of electronic trading.

NYBOT now offers two choices for trading contracts, according to Barry, electronic or traditional open outcry. Electronic trading has virtually taken over cocoa trading, with 80 percent to 85 percent of the volume traded. In cotton, around 40 percent of volume is traded electronically, and 60 percent on the floor.

Electronic trading has increased the volume of trading, which is a good thing, notes Barry, “because if you’re looking to sell, there are more people competing to buy from you, and if you’re looking to buy, there are more people competing to sell to you. So liquidity has improved, which is good. And people have a choice, which is good.”

But what is the impact of having two forms of price discovery taking place side by side for the same contract? On a given day, can you get a better price in the pits, or in cyberspace? This knowledge means money to the cotton producer these days.

There is still time to reserve a place on the roster for the Cotton Forum. But space is limited. Call McClatchy at (888) 795-8071 for registration or more information.

Attendees will also participate in a mock trading session on the NYBOT trading floor before heading out that evening to Shea Stadium for a baseball game between the New York Mets and the Cincinnati Reds.

On July 13, at NYBOT, a panel of experts will bring cotton producers up to date on the latest cotton fundamentals and provide an outlook for the future and pricing strategies.

Special guest speaker at the Roundtable is Joe Nicosia, president and CEO, Allenberg Cotton Co., Memphis. Other panelists include O.A. Cleveland, professor emeritus, Mississippi State University; Carl Anderson, Extension specialist emeritus, Texas A&M University; Jarral Neeper, vice-president, marketing, Calcot; Mike Stevens, Swiss Financial Services; and Pat McClatchy, executive director, Ag Market Network.

You don’t have to be in New York to listen to the Cotton Roundtable. The meeting will be broadcast live on the NYBOT Web site at http://www.nybot.com and by teleconference to the Ag Market Network listening audience. The program will also be carried by KFLP radio, which covers the west Texas area. It’s also available live at http://www.kflp.net, on a 10-second delay. Questions for the meeting will be accepted from the listening audience.

An archive of the roundtable will be available at http://www.nybot.com and http://www.agmarketnetwork.net. The Cotton Forum is sponsored by the New York Board of Trade, Certified FiberMax, Cotton Incorporated, Ag Market Network and Farm Press Publications.