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NGFA ENCOURAGES RESPONSE TO CME GROUP SURVEY ON STORAGE VALUES NE. PSC APPROVED STATE STORAGE INCREASE IN MAY The NGFA is encouraging members to return by the June 11 deadline an important new survey issued by the CME Group that is designed to assist the exchange in establishing accurate storage values for CBOT wheat, corn and soybean futures contracts. The NGFA agreed to assist the CME Group by distributing the survey to its Active members (grain, feed and grain processing companies) that rely on CBOT contracts for risk management and price discovery. The survey follows through on one of the NGFA’s core recommendations made to the CME Group and during an April 22 Agricultural Futures Roundtable conducted by the Commodity Futures Trading Commission (CFTC) that focused on futures market performance and whether convergence still was occurring between futures and cash prices during the delivery period. Meanwhile, The Nebraska Public Service Commission (PSC) has approved increasing corn and other grain storage rates to 000150 per day or 4 cents per month, and soybeans to 000170 per day or 6 cents per month. The PSC expedited the decision in order to provide the 30 day notice grain warehouses have to inform their depositors of any rate increase, and before the wheat harvest begins. The Nebraska Grain and Feed Association (NGF) joined the Nebraska Cooperative Council (NCC) and other agribusiness organizations at the May 7 hearing and strongly supported an increase of storage and handling rates. During the roundtable meeting, the NGFA urged that such a survey be conducted immediately to gather accurate, current information on the value of storage in today’s changed marketplace – which may not accurately reflect the public tariff posted by commercial grain warehouses or the storage rates charged by elevators to their customers. If warranted by the results of the survey, the NGFA will encourage the CME Group and CFTC to implement the updated storage values as soon as possible. If borne out by the survey, higher storage values would enhance convergence by widening the price spread between one futures contract expiration period and the next, and allowing more “carry” to be reflected in futures prices.
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