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Grain Contract options 09/16/11 8:36:01 AM
Farm Country Coop Grain Contracting Alternatives
- Cash (Spot) - Probably the most commonly used contract. Through this type of sale a producer receives the spot price at the Daily closing price. No arrangements need to be made prior to delivery. The producer can choose to receive payment for their grain immediately or they may defer the payment until a later date. Grain spots on Saturday and Sunday will be priced on Fridays close.
- Forward Delivery Contract - The Forward Delivery Contract allows the producer to lock in an elevator's future cash grain price. It locks in both futures and basis and setting the delivery period. This contract is preferred by many producers to establish a new crop selling price.
- Farm Country offers cash contracts from nearby to new crop ‘12
- Contracts made during daytime trading hours 9:30am to 1:15pm
- Offers are always welcome during normal business hours.
- Basis - A Basis Contract is priced in two distinct steps. The initial contract specifies the bushel amount, the delivery period and the "basis" relative to a particular futures option month. This contract allows the seller to partially lock in a future delivery price. The part of the price that is fixed is the basis. The "Basis" is the difference between the cash price and the futures on the CBOT. The futures price is to be set at a future date. Delivery of grain can be made without pricing the CBOT futures price.
- Futures Only (or Hedge-to-Arrive) - The Futures Only Contract, like the basis contract, is priced in two distinct steps. The initial contract establishes the bushel amount, the delivery period and the futures price. HTA fees are billed to the producer at the time of entering the contract. The basis then must be locked-in prior to delivery. Once the basis has been locked-in, the contract becomes a cash contract.
- Offered from Nearby to New Crop ‘12
- Even contract lots only (either mini or full sized contracts)
- Contract fee will be billed at time of entering the contract.
- Soybean HTA’s must be priced or rolled by October 14th
- Corn HTA’s must be priced or rolled by November 15th
- Minimum Price - Minimum Priced Contracts are a very safe opportunity for the producer to participate in market movement for further profit. The producer should use this when anticipating a favorable market move which will enhance his base price while protecting a minimum price should that move not materialize.
- !0 cent fee for corn and beans.
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