Comment Text:
For quite some time both the corn and bean markets have labored under lack of convergence. It creates trade imbalance for domestic bound companies, while the multinationals are able to displace convergence risk to international trade, but none the less it has become a significant yoke for all. We have seen very positive results when the VSR was implemented for Chicago wheat & ultimately KC. Demand for storage is at an all time high both domestically & globally & now the Chinese trade tariffs have only exacerbated the situation. Given our experience with wheat, it only makes sense that the CME should move rapidly to respond to current market conditions & not get bogged down in the politics of focus groups & meetings that seemingly end without any solution. It is imperative that the market work for all participants, not just a select few. Many proposals have been made, but the simpler the better. I support a VSR measure of 80% of full carry to provide a monthly deliverable storage increase of 5 cents , and 50% of full carry to provide a monthly deliverable storage decrease of 5 cents ( not to decrease below the 8 cent / month base rate. Those observation periods should be DEC/MAR for corn & NOV/JAN for beans since these would be the time slots in which new crop space demand is valued for storage purposes.
