|Saturday, September 24, 2022|
Cash Price = Futures Price + Basis
Delayed Pricing (DP)- (also variously known as No Price Established, Price Later, or Deferred Price Contract) Delayed Pricing allows you to move grain without establishing any price. The charges for a Delayed Price (DP) Contract are highly variable, changing with current market conditions.
Cash Forward- Lock in your cash price for a specified quantity of bushels for a specified delivery date and location in the future. This is a great contract to capture grain prices for future delivery. There are no additional fees, it’s very straightforward and easy to use.
Basis Contract- Set basis prior to locking in the Futures price. A basis contract is a great strategy if you are satisfied with the basis level but want more time to capture potential Futures gain. Sell a specific quantity of bushels to a designated location for a certain delivery period. Deliver the grain during your delivery period without locking in a cash price – with no storage (or DP) fees – and receive an advance.
HTA- Price the Futures when levels are attractive and set basis separately prior to time of delivery. HTA contracts allow you to protect yourself from downside risk in the Futures market while continuing to have opportunity to capture any improvement in basis.
Minimum price- Lock in a floor on your Futures contract and continue to participate in potential upside in the grain market using Options. Basis can be set at any time prior to delivery. This contract is customizable to your market bias, operation, and delivery timeframe.
CHI Price Builder Bonus- Price equal quantity daily at a target price above current market levels. If your Futures reference month trades at the knockout price, the contract ends. If no knockout occurs and the Futures reference month is at or above the target price on expiration your bushel obligation doubles at the target price. (Guarantees price, not quantity)
CHI Daily Price Plus- Price equal quantity daily at a “Plus Price” above current market levels. If your Futures reference month trades at or below the trigger price, the remaining quantity is priced at a guaranteed floor price. If no trigger occurs and the Futures reference month is at or above the Plus Price on expiration, your bushel obligation doubles at the Plus Price. (Guarantees quantity, not price)
CHI Cash Plus- Get paid a premium today in exchange for an offer to sell grain in the future at a price you’re happy with. The Cash Plus contract allows you to collect a premium on your personally customized firm offer to attach to a sale of equal quantity in the cash market. If the Futures reference month is at or above your firm offer price on your target date your offer fills; if not, the offer expires but you keep the premium you collected.
Diversifier contract- Price equal amounts of grain at the closing settlement of each trading day of the pricing period (using DEC CBOT corn & NOV CBOT soybean Futures). The Pricing period is 60 CBOT marketing days from (mid-April to early July). The Marketing period only includes day sessions when the CBOT is open and trading. You must set the basis on this contract prior to delivery. (MAR sign-up)
CHS ProAdvantage- Diversify your marketing plan by allowing the grain professionals at Russell Consulting to price a portion of your crop over a 6-month – 2-year period. The Russell Consulting team uses their global knowledge and involvement to identify opportunity in the market to price your grain using a wide variety of marketing strategies. The only thing you have to decide is the quantity of bushels to put in the program and delivery location. Basis can be set at any time while the contract is pricing or at the conclusion, before delivery. (DEC sign-up)
For additional information or contract details, contact Clara City Farmers Elevator at 320-847-3330.
This material has been prepared by Prinsburg Farmers Coop and should be considered a solicitation.
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There is a risk of loss when trading commodity futures and options.
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