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The Kansas Farm Bureau reports that 2016 wheat basis in Kansas is extremely weak and CBOT KC HRW futures are not converging at delivery points. It cites futures premiums of $0.32 to $0.62 over KC truck bids and urges members to support a Variable Storage Rate in the contract.
Non-convergence weakens the link between futures and cash HRW prices, so hedgers and buyers face basis risk, though the story itself concerns contract design rather than a supply shift.
kfb.orgJan 31, 2017Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
