The excuse they have been waiting for...

Since the OK by shareholders, real-world plans for merging the CBOT and CME are gathering momentum. Although it has seemed obvious to many besides me, this event offers the perfect opportunity to allow open-outcry to dwindle to a spectator curiosity.

The Merc's purchase of the CBOT marks a transition from pit to electronic trading, said Caitlin Zaloom, an assistant professor at New York University and author of ``Out of the Pits: Traders and Technology from Chicago to London'' (University of Chicago Press, 238 pages, $29).

Zaloom said moving the Merc's pits to the CBOT building preserves traditional face-to-face trading, which many traders still prefer. Eventually, though, she expects trading floors to become obsolete as electronic trading takes over. [More]

Brokers who appear on the show have been remarking for months how floor traders spend much of their time watching the screens during side-by-side trade, and how volume is shifting to e-trade. The success of e-CBOT trading demonstrates that institutional investors especially like this method, and as they go, so goes the bulk of trades.

Farmers have always had a love-hate relationship with traders, associating (unfairly, it turns out) the human element of open outcry with the possibility of human manipulation. Still, producers are equally suspicious of computer transactions too.