Comment Text:
Our industry is in need of a storage rate that’s dynamic to market conditions and doesn’t take so long to implement. It’s imperative that CME Group review its proposal. We’re subject to incredible price volatility, and with the added frequency of non-converging markets, we need a solution that reduces producer risk.
The proposed VSR hybrid with one yearly observational period would create less complexity and uncertainty for producers. The current lack of convergence significantly impacts my crop insurance. Given crop insurance reference prices use futures prices while my actual sales use cash prices, my coverage is significantly lower than what it should be during times of non-convergence, which is becoming the norm.
The current storage rates have been too low for too long. It’s time for a change that reflects the current environment.
