KCBT approves wheat futures contract changes

KANSAS CITY, MISSOURI, U.S. — Members of the Kansas City Board of Trade (KCBT) in a special election Nov. 30 approved amendments to the exchange’s hard red winter wheat futures contract mainly related to storage rates and delivery specifications.

The KCBT board of directors had approved the amendments on Nov. 4, and the membership passed the proposed changes by a margin of 115 to 36, according to the KCBT.

The approved amendments follow:

"The base storage rate shall be increased from 4½¢ per bushel per month ($.00148 per bushel per day) to 6¢ per bushel per month ($.00197 per bushel per day), and shall be applicable during the calendar months of December through June.

"There shall be a harvest storage premium added during the calendar months of July through November of 3¢ per bushel per month ($.00099 per bushel per day), resulting in a storage rate during these months of 9¢ per bushel per month ($.00296 per bushel per day).

"Payment of storage on outstanding warehouse receipts up to the first calendar day of each delivery month (whether or not such receipts will be delivered in satisfaction of futures contracts).

"The harvest storage premium shall become effective on Sept. 1, 2011.

"The storage payment obligation on outstanding warehouse receipts shall become effective with the September 2011 futures contract, meaning that the accrued storage liability on all outstanding warehouse receipts must be paid through (and payment received by) Aug. 31, 2011, which is the first notice day of the September 2011 contract. Accrued storage shall be paid through and by the first notice day of each successive contract month thereafter.

"Effective with the September 2011 futures contract, deliverable grades of hard red winter wheat shall contain a minimum 11% protein level. However, protein levels of less than 11%, but equal to or greater than 10.5%, are deliverable at a 10¢ discount to contract price. Protein levels of less than 10.5% are not deliverable.

"Holders of outstanding warehouse receipts following the expiration of the July 2011 contract month will have five business days (Aug. 24-30, 2011) to present such warehouse receipts to the issuing warehouse for upgrading to reflect a deliverable protein level. The issuing elevator must comply with such request and shall, in its sole discretion, make the determination as to the minimum protein level to designate on receipts presented for upgrading. The issuing elevator may charge the holder 12¢ per bushel to upgrade receipts with a designation of 11% minimum protein, or 2¢ per bushel to upgrade receipts with a designation of 10.5% minimum protein. Warehouse receipts not upgraded shall not be deliverable against futures contracts from September 2011 forward.