CME Group Recommends Changes to Wheat Contract in Order to Improve Convergence
September 05 2008 - 10:00AM
PR Newswire (US)
CHICAGO, Sept. 5 /PRNewswire-FirstCall/ -- CME Group, the world's
largest and most diverse derivatives exchange, today submitted
changes to its regulator for the benchmark wheat futures contract.
The changes, which call for seasonally increased storage fees and
additional delivery points, have been recommended to improve
convergence between futures and cash prices at contract expiration.
The Commodity Futures Trading Commission (CFTC) must approve any
contract changes and proposed implementation schedule pertaining to
the grain and oilseed listings at CME Group if the changes are
applied to contract months with open interest. The recommendations
are based on input from market participants, including commercial
interests, grain elevators, individual traders, proprietary trading
firms and others. -- Changes to the storage rates include
introducing seasonal premium charges to be increased during the
period from July through November to 8 cents per bushel per month.
During the remainder of the crop year from December through June,
the exchange is recommending that premium charges remain at their
current level of 5 cents per bushel per month. -- Three additional
delivery territories are also being recommended. The delivery areas
would include shuttle train loading facilities in a 12-county area
of northwest Ohio; barge loading facilities on the Ohio River from
Cincinnati to the Mississippi River; and barge loading facilities
on the Mississippi River from below St. Louis to Memphis. In
addition, northwest Ohio locations will be added at a 20 cent per
bushel discount; Ohio River locations at par; and Mississippi River
locations at a 20 cent per bushel premium. -- Finally, the exchange
is recommending that the vomitoxin level for par delivery be
lowered from three parts per million (ppm) to two ppm. Wheat
containing three ppm of vomitoxin will continue to be deliverable
at a 12 cent per bushel discount and wheat containing four ppm of
vomitoxin will continue to be deliverable at a 24 cent per bushel
discount. The seasonal storage rate and additional delivery
locations are proposed to be implemented beginning with the July
2009 contract month and the lower vomitoxin level will be
implemented with the September 2011 contract month. For more
information, please see the exchange's Special Executive Report
http://cmegroup.com/rulebook/rulechanges.html or the filing at
http://www.cftc.gov/. CME Group (http://www.cmegroup.com/) is the
world's largest and most diverse derivatives exchange. Building on
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found at http://www.cmegroup.com/. CME-G DATASOURCE: CME Group
CONTACT: Mary Haffenberg, +1-312-930-3435, or Allan Schoenberg,
+1-312-930-8189, , or Investors, John Peschier, +1-312-930-8491,
all of CME Group Web site: http://www.cme.com/
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