The Variable Storage Rate (VSR) mechanism in Chicago Board of Trade (CBOT) Wheat futures examines nearby calendar spreads to determine adjustments in contract premium (storage) charges. The July 2013 – September 2013 wheat calendar spread averaged -0.16 percent of financial full carry during the period of May 20, 2013 through June 21, 2013. Since this result is below 50 percent of financial full carry and since current Wheat storage rates are already at their minimum, the maximum premium charge that a Wheat regular delivery facility may charge holders of its outstanding shipping certificates will not change from the current maximum charge of 16.5/100s of one cent per bushel per day (approximately 5 cents per bushel per month).
The next evaluation period will measure the September 2013 – December 2013 calendar spread relative to financial full carry during the period of July 19, 2013 to August 23, 2013 with the next possible adjustment to contract premium charges on September 18, 2013.
The current maximum storage rate of 16.5/100s of one cent per bushel per day is the contract minimum storage charge, and a VSR calculation at or below 50% on the September 2013 – December 2013 spread cannot trigger a lower storage rate.
Questions may be directed to Fred Seamon in Research and Product Development (312-634-1587 or Fred.Seamon@CMEGroup.com).