CME Group, the world's largest and most diverse derivatives exchange, announced today that the Commodity Futures Trading Commission (CFTC) has given regulatory approval for changes to its world benchmark Soft Red Winter Wheat futures contract. The changes, which include seasonal storage fees and additional delivery points, are designed to improve convergence between wheat futures and cash prices at contract expiration.
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 others. The approved changes include the following:
- Changes to the storage rates include introducing seasonal storage charges to 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.
- Finally, the exchange is lowering the vomitoxin level for par delivery 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.
For more information, please see the exchange's Special Executive Report http://cmegroup.com/rulebook/rulechanges.html or the filing at http://www.cftc.gov.
