(Adds market reaction, open interest data)

By Christine Stebbins

CHICAGO, Nov 11 (Reuters) - The CME Group (CME.O: Quote, Profile, Research), the world's largest derivatives exchange, said on Wednesday it plans to implement variable storage rates beginning with its July 2010 wheat contract, pending approval of the Commodity Futures Trading Commission.

The move was done to improve convergence of wheat cash and futures prices at futures expiration.

"It's difficult to say what's gone on behind the scenes between the CFTC and the CME," said Rich Feltes, senior vice president of MF Global Research. "But the very fact that they moved it up to July suggests that they are trying to be a little more responsive to industry pressure."

CME's previous plan was to implement variable storage rates with the September 2010 contract. That plan had been submitted to the commission for approval in late September with a CFTC decision expected by Friday.

"July implementation versus September implementation is not materially different because under current rules the seasonal storage rate would take effect on July 18 and the storage rate will go from 5 cents per bushel per month to 8 cents per bushel per month -- that's under current rules," CME economist Fred Seamon said in an interview.

The CME's wheat markets reflected the new rates, traders said. The price difference between July 2010 WN0 and December 2010 WZ0 contracts grew by 3-1/2 cents a bushel on Wednesday. Other deferred spreads, such as July/March widened by 4-1/2 cents.

The National Grain and Feed Association, a big trade group that includes elevators which benefit from higher storage fees, has pushed to get variable storage rates in place earlier than September 2010. But the CME and its floor traders objected, citing disruptions to positions already in the market.