Comment Text:
To whom this may concern,
The lack of convergence between delivery system and cash market has challenged not only country elevators, but also has shown ill affects on the performance of crop insurance. In the past 2 years there has been minimal convergence which has pushed basis very wide vs futures since spreads have not been wide enough to reflect true carry. I believe the increased daily storage rate from 5 cents to 8 cents is required, but in a year such as this where the market is extraordinarily challenged by tariff trade there needs to be an additional safety net such as a VSR. A proposed hybrid would be to add an observation period that occurs once per year which would increase the daily storage rate from 8 cents to 13 cents for the entire year. By having one review per year would improve storage rate visibility to the market. This would significantly help convergence and allow quicker reaction to market conditions which is what the futures market was designed to do.
Appreciate your consideration,
Justin Yoesel
