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.

Wheat and Mini-Sized Wheat Futures – (Increase)

 The September 2023 – December 2023 Wheat calendar spread averaged 90.29 percent of financial full carry during the period of July 19, 2023 through August 25, 2023. VSR results that are greater than 80-percent of financial full carry trigger an increase in the maximum premium charge. Therefore, the maximum premium charge that a Wheat futures regular delivery facility may charge holders of its outstanding shipping certificates will increase from the current maximum charge of 16.5/100s of one cent per bushel per day (approximately 5 cents per bushel per month) to 26.5/100s of one cent per bushel per day (approximately 8 cents per bushel per month) on September 19, 2023.

KC HRW & Mini-Sized KC HRW Wheat Futures – (No Change)

The September 2023 - December 2023 KC HRW Wheat calendar spread averaged 34.48 percent of financial full carry during the period of July 19, 2023 through August 25, 2023.  VSR results that fall below 50 percent of financial full carry normally trigger a reduction in the maximum premium charge. However, regular delivery facility charges for holders of outstanding shipping certificates for KC HRW Wheat futures are already at the minimum rate.  Therefore, the maximum premium charge that a KC HRW Wheat futures 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

The next evaluation period for both contracts will measure the December 2023 – March 2024 calendar spread relative to financial full carry during the period of September 19, 2023 to November 24, 2023 with the next possible adjustment to contract premium charges on December 19, 2023.