Comment Text:
As a privately held country elevator company in Southern Texas, we are happy to see the CME move towards raising the storage rates per earlier news releases. However, we would advocate for an additional variable rate system or something similar to what the VSR has implemented in wheat. Both corn and beans lack of convergence needed to be addressed even though we are still a year from starting the new rates. There have been recommendations by industry professionals suggesting for both corn and beans to have a system that sets a one year observation period for new crop corn and bean spreads - corn Dec/March, beans Nov/Jan. If those spreads were to average 80% of full carry the system would increase storage rates by 5 cents/bu per month while if the spreads would narrow back to 50% or less the storage rates would return back to the new revised 8 cents per month. The new rates set for a period of one year would make it simple and reliable for the trade to more fully understood. Also, if the raised minimum storage does not correct the problem, the variability in rates would allow changes in storage rates to occur automatically allowing the system to correct itself.
