The National Grain and Feed Association (NGFA) urged the CME Group and the Commodity Futures Trading Commission (CFTC) to implement changes to the Chicago Board of Trade (CBOT) wheat futures contract as soon as possible, to begin the process of enhancing the contract’s performance.

During a presentation at a CFTC Agricultural Advisory Committee meeting, the NGFA supported adoption of a variable storage rate concept as the next logical step to reestablish a convergence of cash and futures market values as futures contracts approach expiration.

But the NGFA cautioned the variable storage rate concept will take time to have its intended effect, since the storage rate would increase only gradually in response to futures market spreads.

That means it is imperative the changes to the CBOT wheat futures contract be implemented “as soon as possible,” said Matt Bruns, NGFA risk management committee vice chair, and “ideally” with the December 2009 contract.

“Waiting until September 2010 to implement the variable storage rate, as proposed by the CME Group, could result in another two years before the change would have its full effect,” said Bruns, vice president of exports for Archer Daniels Midland Co.