Exchanges widen the deliverable pool by allowing substitutes at set premiums or discounts. This keeps a contract from being squeezed by scarcity of one exact grade, at the cost of giving the short a choice — and the short will always deliver the cheapest option available.
The same logic drives cheapest-to-deliver in Treasury futures, where a conversion-factor plays the role of the differential.
Example: a wheat contract may accept a lower-protein class at a 10-cent discount and a higher one at a 3-cent premium. If the cash discount for that lower class is only 6 cents, shorts will deliver it all day.
Related: deliverable-grade, cheapest-to-deliver, physical-delivery, basis