The Commodity Futures Trading Commission has approved amendments to the Chicago Board of Trade’s wheat futures contract. Commission staff hope the amendments will increase economically-available deliverable supplies, delivery capacity and the number of shipping certificate issuers for the futures contract and should reduce the contract’s overall susceptibility to manipulation.

“The commission and the industry have been concerned about this contract’s performance and the lack of convergence between the contract’s cash and futures prices,” said Walt Lukken, CFTC acting chairman.

“While these amendments are a good first step, additional changes may be needed to ensure that this contract serves its price discovery and risk management functions.”

The CFTC has appointed a panel to study the convergence issue and report back to the CFTC in the spring with additional contract amendments should they be necessary.”

The approved amendments do the following:

• add three new delivery locations, including a 12-county area in northwest Ohio at a discount of 20 cents per bushel; a territory along the Ohio River from Cincinnati to Mississippi at par; and a territory along the Mississippi River from St. Louis to Memphis at a 20 cents per bushel premium;

• increase storage fee to 8 cents per bushel from 5 cents per bushel for the period from July 18 through December 17;

• reduce the vomitoxin level for par delivery to 2 parts per million from 3 ppm and establish a discount for wheat with 3 and 4 parts per million at rates of 12 and 24 cents per bushel, respectively.

The amendments relating to the additional delivery territories and seasonal premium rates will be effective for existing and newly listed contract months beginning with the July 2009 contract month. The amendment relating to the lower par vomitoxin level will be effective for newly listed contract months beginning with the September 2011 contract month.

In approving the amendments, the commission noted that it will be closely monitoring the trading of this contract to determine if the amendments successfully address the problem of contract performance, particularly the periodic failure of futures prices to converge with cash prices.