CHICAGO, Feb 26 (Reuters) - The CME Group on Monday said it will raise storage rates for K.C. hard red winter wheat futures after the contract’s first variable storage rate (VSR) observation period.
* Storage rates for K.C. wheat will increase to about 8 cents per bushel per month, up from about 6 cents, after wheat calendar spreads from Dec. 19, 2017 to Feb. 23, 2018 averaged 95.43 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 51.46 percent of full carry.
Reporting by Michael Hirtzer