July 10, 2018 / 10:29 PM / a year ago

UPDATE 1-USDA to stop giving media early access to crop data under embargo

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By Tom Polansek

CHICAGO, July 10 (Reuters) - The U.S. Department of Agriculture will stop giving crop data under embargo to media starting next month in an attempt to make the release of market-moving information more fair, officials said on Tuesday.

The change means news organizations will gain access to reports on global grain supplies and demand at the same time as the general public.

The USDA for years allowed media, including Reuters, early access to crop data but barred news outlets from publishing the data until a specified time.

Providing the information under an “embargo” gave reporters time to analyze the data, which can roil grain prices, and prepare news reports.

But the USDA said the system effectively gave a two-second head start to customers of media outlets because USDA takes longer to publish the data on its website than the news sites. After public inquiries, the agency determined this gave some media users a trading advantage.

“The new procedures will level the playing field and make the issuance of the reports fair to everyone involved,” USDA Secretary Sonny Perdue said.

Evidence suggested that trading activity worth millions of dollars occurred in the two seconds after monthly crop reports were released at 12 p.m. eastern (1700 GMT).

“The inference is that private agents are paying the news agencies for faster data transmission to get a jump on the market,” the USDA said.

The news media are allowed access to crop data about 90 minutes early in a room at USDA headquarters in Washington D.C., with their reports embargoed until noon.

“The media has a legitimate interest in getting access to that data so they can disseminate it to the public,” said Kirsten Wegner, chief executive of Modern Markets Initiative, which represents high speed and algorithmic traders.

“If they’re making it available to all media and not a select few, then there should not be a problem with it.”

The last report available to the media under embargo is scheduled for release on Thursday. (Additional reporting by Washington newsroom; editing by Jonathan Oatis and Cynthia Osterman)

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