By a vote of 115 to 36, the members of the Kansas City Board of Trade have adopted a series of measures to address the lack of convergence between the Board's Hard Red Winter Wheat futures contract and cash prices received by farmers. First of all, the changes made increase the base storage rate from 4.5 cents per bushel per month to 6 cents per bushel per month during the calendar months of December through June; adds a "harvest storage premium" in calendar months July through November of 3 cents per bushel per month; and requires payment for storage on the first calendar day of each delivery month, with payment through August 31, 2011, due before the changes go into effect on September 1, 2011.
The changes will also affect protein levels accepted for KCBT wheat contracts. Starting with the September 2011 futures contract, hard red winter delivered must contain a minimum of 11% protein, with a 10 cent discount for levels between 10.5% and 11%. Protein levels less than 10.5% would not be deliverable. The new KCBT contract specifications will also carry a vomitoxin restriction of two parts per million, down from four ppm. The changes must still be approved by the Commodity Futures Trading Commission.
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