In an effort to improve convergence between wheat futures and cash prices at contract expiration for the Soft Red Winter wheat, the Commodity Futures Trading Commission (CFTC) has approved seasonal changes to storage fees, additional delivery points and a lower allowable level of vomitoxin contamination, CME Group announced Thursday.
CME Group requested approval of the changes from the CFTC based on input from market participants, including commercial firms, grain elevator operators, individual traders, proprietary trading firms and other market participants.
Changes include the following:
- Seasonal storage charges will be increased during the period from July 18 through December 17 to 8 cents per bushel per month. During the remainder of the crop year from December 18 through July 17, storage charges will remain at their current level of 5 cents per bushel per month.
- Three new delivery territories will be added to include: shuttle train loading facilities in a 12-county area of northwest Ohio; barge loading facilities on the Ohio River from Cincinnati to the Mississippi River; and barge loading facilities on the Mississippi River from south of St. Louis to Memphis. The northwest Ohio locations will be added at a 20 cent per bushel discount, Ohio River locations at par, and Mississippi River locations at a 20 cent per bushel premium.
- The vomitoxin level for par delivery will be lowered from three parts per million (ppm) to two ppm. Wheat containing three ppm of vomitoxin will continue to be deliverable at a 12 cent per bushel discount and wheat containing four ppm of vomitoxin will continue to be deliverable at a 24 cent per bushel discount.
The seasonal storage rate and additional delivery locations will be implemented beginning with the July 2009 wheat contract and the lower vomitoxin level will be implemented with the September 2011 contract, CME Group stated.
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