* USDA monthly crop report the last before 22-hour cycle
* Traders to lose luxury of time to digest reports
* Expanded trading set to start on Monday
By Tom Polansek and P.J. Huffstutter
CHICAGO, May 10 (Reuters) - The ka-chunk, ka-chunk of punch clocks echoed across the silent trading floor at the Chicago Board of Trade, as a tiny group of traders gathered at the soybean oil pit for a ritual as routine as the seasons -- the U.S. government's monthly crop report.
But now, for one last time, these traders were allowed a luxury that some had taken for granted: time.
On Thursday, likely for the final time, farmers, brokers and dealers had a precious two hours to consider the implications of the U.S. Department of Agriculture's latest outlook on grain supply and demand before the melee of futures trading commenced.
Inundated with scores of data points -- from U.S. soybean yields to Chinese imports -- traders say those two hours can help preserve a client's fortune, or avoid a hefty loss.
But that window of time is set to close.
Under pressure from hedge funds and bigger traders who want round-the-clock access to grain markets, the IntercontinentalExchange will launch continuous 22-hour trading of its new grain contracts next Monday, a move that forced CME Group's CBOT to follow suit beginning May 21.
Surrounded by empty trading pits and stacks of call trading cards gathering dust, the handful of floor traders in Chicago contemplated their future in world of real-time data.
"How are you supposed to trade faster than a computer algorithm?" asked independent grains trader Mary Ann Kwiatkowski, as she wandered across the floor Thursday morning.
She's not used to the quiet. Just six years ago, a report day like Thursday's would have meant a crush of bodies in the aisles before the news broke, and in the pits afterward.
Current trading hours were designed so that markets would be shut when key reports are released because they can roil futures prices. The top U.S. grain groups on Thursday urged federal regulators to delay the start of 22-hour trading, over fears it will increase volatility and give a competitive advantage to large traders that use high-speed trading systems.
Now, watching the electronic clock looming over the trading floor tick past 7:30 a.m., Kwiatkowski, wearing a khaki trading jacket, joined a group of 19 other veterans to stand and assess the news. In between the chatter, their talk touched on the future.
One man complained about being squeezed out by high-frequency traders, who pay a premium to place their computers alongside those of the exchanges in order to gain faster access to information. Another wondered if the CME cared that traders wouldn't have time to read future USDA reports - let alone try to figure out what the data means.
A female trader leaned close to Kwiatkowski and whispered, "The floor doesn't matter to them anymore."
Grain traders are the latest to be forced to adapt to the rigors of near round-the-clock trading. Many don't like it.
Oil traders have contended with volatile weekly inventory data released in the middle of trading for a decade; foreign exchange and Treasury brokers have long been required to digest growth data and jobless figures while punching trades.
Cash equity traders are among the few who still get some reprieve, with U.S. company earnings typically released before and after the bell - although the rise of alternative venues means their trading also runs beyond traditional market hours.
Even for commodities traders who have embraced the electronic world, Thursday was a day of mourning.
Eight floors above where Kwiatkowski stood at the open-outcry pits, phones began ringing inside the office of brokerage Linn Group within three minutes of the USDA report.
President Gordon Linn, who grew up on a grain and cattle farm in central Iowa, fears that the change will lead to more volatile trading before and after the report, as liquidity drains away.
"People who want to analyze won't enter any orders," he said.
Thursday's report was a relatively muted one by recent standards. Soybeans rose, corn fell, but neither by the six-plus percent daily limits that have become commonplace. The government predicted that domestic corn inventories will surge by next summer to their highest in seven years, aided by the largest planting since 1937. Record-large soybean exports next season could shrink soybean stocks to the lowest in four years.
Ten brokers and analysts, separated by their desks in the softly lit office, chatted about the data as they kept their eyes glued to their computer screens.
Jerrod Kitt, director of research, sent an electronic "news blast" with key data out to clients on an internal messaging system.
Such messages will be even more important next month when traders will need to see the crop data as soon as possible, he said. Nearly 60 introducing brokers who work with the firm want a quick analysis of the data so they can begin passing it along to their customers, which include many farmers.
Executive vice president Roy Huckabay recorded comments so clients could dial in to hear his thoughts. At one point Thursday morning, Huckabay, wearing a plaid shirt and holding a phone to each ear, was calling one client while leaving a message for another.
Kitt leaned over his desk to tell Huckabay a third caller was waiting on the line for him.
"I'm tied up," Huckabay said.
Downstairs, on the trading floor, Kwiatkowski's cell phone rang.
It was a Midwestern farmer and long-time friend, wanting to know what the chatter was on the floor. The grains trader took a deep breath and began to reel off the consensus.
Corn? Bearish. Soybeans? Bullish. Future? Uncertain.