Variable Storage Rates (VSR)

Variable Storage Rates (VSR) is a market-based determinant of maximum allowable storage charges for outstanding wheat shipping certificates. It triggers higher maximum allowable storage charges that allow wider spreads when spreads are near financial full carry and lower maximum allowable storage charges when spreads are narrow or inverted. Market participants may follow the daily VSR calculations during the observation period at the "VSR Calculator" link below.

Nearby spreads that average 80 percent of financial full carry or greater will trigger an increase in maximum allowable storage charges by 10/100s of one cent per bushel per day (approximately 3 cents per bushel per month) following the nearby delivery period. Conversely, nearby spreads that average 50 percent of financial full carry or less will trigger a decrease in maximum allowable storage charges by 10/100s of once cent per bushel per day following the nearby delivery period. Should nearby spreads average over 50 percent of financial full carry and less than 80 percent of financial full carry, the maximum allowable storage charges will remain the same as in the previous period. There is no upper limit for maximum allowable storage charges under VSR, but the minimum rate is 16.5/100s of one cent per bushel per day.

For Chicago SRW Wheat Futures:

The July 2018 – September 2018 wheat calendar spread averaged 57.38 percent of financial full carry during the period of May 21, 2018 through June 22, 2018.  Since this result falls between 50 percent and 80 percent of financial full carry, the maximum premium charge that a Chicago SRW Wheat regular delivery facility may charge holders of its outstanding shipping certificates will not change from the current maximum charge of 36.5/100s of one cent per bushel per day (approximately 11 cents per bushel per month).

For KC HRW Wheat Futures:

The July 2018 – September 2018 calendar spread averaged 63.37 percent of financial full carry during the period of May 21, 2018 through June 22, 2018.  Since this result falls between 50 percent and 80 percent of financial full carry, the maximum premium charge that a KC HRW Wheat regular delivery facility may charge holders of its outstanding shipping certificates will not change from the current maximum charge of 36.5/100s of one cent per bushel per day (approximately 11 cents per bushel per month).

The next evaluation period for both contracts will measure the September 2018 – December 2018 calendar spread relative to financial full carry during the period of July 19, 2018 to August 27, 2018 with the next possible adjustment to contract premium charges on September 19, 2018.

VSR Updates

SER-8139 - Variable Storage Rate (VSR) Results for Wheat and KC HRW Wheat Premium (Storage) Rates

SER-8102 - Variable Storage Rate (VSR) Results for Wheat and KC HRW Wheat Premium (Storage) Rates

SER-8043 - No Change in Wheat Premium (Storage) Rates Triggered in December 2017

SER-7957 - Implementation of Amendments to the Delivery and Storage Mechanisms for KC HRW Wheat Futures and Mini-Sized KC HRW Wheat Futures Contracts

SER-7927 - Additional Information Regarding Amendments to the Delivery Mechanism for KC HRW Wheat Futures Contracts and Mini-Sized KC HRW Wheat Futures Contracts

SER-7923 - Amendments to CBOT Chapters 7, 14H and 14N in Connection with the Implementation of Variable Storage Rate and Migration of Delivery Rules for KC HRW Wheat Futures Contracts

SER-7872 - Implementation of Variable Storage Rate (VSR) Mechanism in the KC HRW Wheat Futures and Mini-Sized KC HRW Wheat Futures Contracts Effective with the 2018 March – May Spread