April 24 (Reuters) - The CME Group on Tuesday said it will raise storage rates for K.C. hard red winter wheat futures on May 18, after the contract’s first variable storage rate (VSR) observation period.
* Storage rates on K.C. wheat futures will increase to about 11 cents per bushel per month, up from 8 cents wheat calendar spreads from March 19 to April 20, 2018 averaged 93.90 percent of financial full carry.
* CME Group last year installed the VSR mechanism on K.C. wheat, in which the exchange raises storage rates when calendar spreads average above 80 percent of full carry. If spreads average below 50 percent, the exchange lowers storage rates.
* The exchange said it will not change storage rates of about 11 cents per bushel for Chicago Board of Trade wheat futures after spreads during the period averaged 62.48 percent of full carry. (Reporting by Nallur Sethuraman in Bengaluru)