Comment Text:
The lack of market convergence is a real concern for our organization and the farmers that we serve. I am thankful that the CME has recognized this issue and is addressing it. The proposed change of increasing the deliverable premium to increase to 8 cents/month is a step in the right direction.
Our company supports an additional change similar to the VSR (variable storage rate) that has been used in wheat, for corn and soybeans. We would, however, like to see a hybrid of this be implemented that creates less complexity and uncertainty about full market carry.
We would like to see a hybrid that utilizes the current VSR measures 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. The decrease would not go below the 8 cent monthly base rate. The adjustment done on an annual basis would make it less complex.
