The wheat contract rule changes approved by the membership on June 20, 2007 become effective with the July 2008 wheat futures contract month. In that regard, any person establishing a position in the July 2008 wheat futures contract month or beyond does so pursuant to the amended rules and any economic decision made in establishing such a position should be done with that understanding. In addition, trading in the May 2008 wheat futures contract month should be done with an understanding of the aforementioned rule changes and the relationship between this month and the July 2008 contract month.
IMPORTANT
Warehouse receipts accepted in satisfaction of futures contracts prior to July 2008 reflecting a grade of #3 HRW will not be deliverable against the July 2008 (or any subsequent) futures contract month unless the warehouse receipt holder pays for and upgrades such receipts to a grade of #2 HRW pursuant to and within the time frame prescribed by Resolution 18-1800.00-3. If such receipts are not upgraded, holders will have to either order the grain to be loaded out of the warehouse for shipment or sell/exchange the receipts in the cash market.
In addition, beginning with the July 2008 wheat futures contract month, any new warehouse receipts issued for delivery in satisfaction of wheat futures contracts must indicate thereon, a maximum of 10 IDK (indicating no more than 10 insect damaged kernels per 100 grams). In accordance with Resolution 18-1800.00-2, any warehouse receipts issued in prior delivery periods and still outstanding in July 2008 (that do not indicate thereon a maximum of 10 IDK) shall be subject to the 10 IDK restriction.
The full text of changes to Rules 1218.00, 1219.00, 2000.00, 2000.03 and 2000.06, Resolutions 17-1715.00-1, 17-1715.00-2, 18-1800.00-2 and 18-1800.00-3, and the Interpretation of the Delivery Rules in Chapter 12 can be viewed online at: KCBT Rule Book
Changes are as follows:
• Additional delivery points of Salina/Abilene and Wichita• Location differentials
12 cents per bushel under contract price for Salina/Abilene
6 cents per bushel under contract price for Wichita
• Contract grades of No. 2 hard red winter or better
• Maximum 10 insect damaged kernels (“IDK”) per 100 grams
• Load out fee of 8 cents per bushel
• Storage of 4.5 cents per month
• Railcar load out cadence: warehouse receipted delivery wheat by warehouse
Up to 3,000,000 bushels: 30 per day/150 per week
3,005,000 to 4,000,000 bushels: 40 per day/200 per week
4,005,000 to 5,000,000 bushels: 50 per day/250 per week
Each like increment up, add 10 per day/50 per week
To view the specific rule amendments, click here: KCBT Rule Book