Comment Text:
As a grain producer, it's important to my price risk management program to have futures prices and cash prices come together (converge). The convergence process has worked particularly poorly for soybean prices in the last 2 years.
In addition to increased basis risk in my marketing program, my crop insurance reference prices utilize futures price levels while my actual grain sales utilize cash prices. Therefore, my crop insurance effectiveness is less than it should be when non-convergence happens.
The proposed increase in delivery storage rates should help this situation. But I believe a further step should allow automatic future changes in deliverable storage rates when applicable, rather than going through a period of debate and delayed changes like led CME to the current proposal.
Thank you.
