When the CME Group pledged $300 million of its own money to help former MF Global customers get their cash back faster, the exchange was likely thinking of customers like Kansas cattle rancher Tim Rietzke.
Fed up and frustrated with his broker's collapse and what he sees as the CME's slow efforts to help him retrieve $30,000 in stranded capital, Rietzke says his faith in the futures industry has been shaken to its core.
``I would be hedging some feeder cattle right now, but I'm not going to do it. I'm leaving them exposed to the cash market and I don't like that,'' Rietzke said.
Rietzke may reside far from the trading pit in Chicago, but he and thousands of other ranchers and farmers across the country are at the heart of futures trading.
With billions of their dollars locked up by MF Global's Oct. 31 bankruptcy filing, they are a key voice in determining if and when the futures business regains its poise and reputation.
``I have no confidence in the market, because it could happen at any other brokerage,'' Rietzke told Reuters from his 8,000 acre ranch near the southwest Kansas town of Coldwater.
Dozens of other market participants, most of them smaller introducing brokers or independent traders, say the painful lesson of MF Global is forcing them to reconsider a livelihood in the market and how they hedge future crops and livestock.
Some, like Rietzke, could reduce their hedging, or cut back on day-trading; others may take up trading exchange-traded funds (ETF) that track commodity prices, but are backed by a brokerage insurance fund by securities regulators.
While trading activity in New York and Chicago has recovered following a slump immediately after MF Global's collapse, exchange officials and experts fear the crisis -- as well as its messy, protracted aftermath -- may have a chilling effect on the markets for months or years.
As the symbolic figurehead of the futures universe thanks to its ownership of both the Chicago Board of Trade and the New York Mercantile Exchange, the world's biggest agricultural and energy markets, it is the CME Group that -- to many traders -- bears an enormous burden for making things right.
Monday's news that the missing funds at MF Global may have doubled to $1.2 billion has only deepened the mistrust of the system.
It remains to be seen just how much talk of quitting the market is bluster. Traders are livid over both MF Global's collapse and what they perceive as the CME Group's failure to act quickly or boldly enough to restore order to the market -- a criticism that some analysts and experts say is misplaced.