Dear Patron,
Welcome to the world of higher grain prices, cash rent costs, higher input costs, higher fuel costs, higher electric and natural gas prices and higher stress. The only things I can think of that aren’t going higher are interest rates and housing prices. I’m sure that this is an over-simplification of the current economy, but we are experiencing in the grain industry one of the most volatile and rapidly changing markets in the history of commodity markets.
Your Board of Directors and Management have initiated a couple of policy changes. The policies are meant to deal with the increased volatility in this new environment we find ourselves. The need to limit your company’s exposure to large price swings between the closing of the grain markets at 1:15 p.m. each day and the time between the night session opening at 6:00 p.m. each evening and the start of the day session the following day is the reason we will only be taking pricing offers while the markets are not trading.
***********POLICY CHANGE***********
FLAT PRICE PURCHASE CONTRACT POLICY
EFFECTIVE DATE
MARCH 10, 2008
- MOWEAQUA FARMERS COOP WILL PURCHASE CASH GRAIN DAILY DURING CHICAGO BOARD OF TRADE (cbot) TRADING HOURS. THE PERIOD FOR PURCHASING CORN, SOYBEANS, AND WHEAT WILL BE A 12 MONTH WINDOW THAT WILL MOVE FORWARD AS EACH CALENDAR MONTH ENDS. This policy is subject to change at any time.
- EXAMPLE: USING MARCH 2008 AS THE CURRENT MONTH, WE WILL PURCHASE GRAIN FROM YOU FOR ANY MONTH THROUGH March 2009, ( 12 months out). WHEN WE GET TO APRIL 2008, THE 12 MONTH WINDOW MOVES AHEAD TO April 2009.
THIS POLICY WILL BE REVIEWED GOING FORWARD AND WILL BE SUBJECT TO CHANGE AT ANY TIME.
· AFTER THE CHICAGO BOARD OF TRADE (cbot) DAY SESSION HAS CLOSED AT 1:15 P.M. OUR POLICY WILL BE TO PURCHASE CORN, SOYBEANS AND WHEAT BY OFFER ONLY. Your offer will be executed in the eCBOT night trading session if the futures price less the corresponding basis of your offer is hit. If that offer is unable to be filled, it will automatically be put into the day session at the CBOT for execution or offered into the end user cash market at buyer’s discretion. The offer will be good till cancelled.
- THE SAME WILL TAKE PLACE EACH MORNING PRIOR TO THE OPENING OF THE CBOT DAILY TRADING SESSION.
- THESE POLICY CHANGES HAVE BEEN MADE DUE TO THE EXTREME VOLITILITY AND CASH DEMANDS OF A BULL MARKET.
We realize that the policy changes will create an adjustment to the way we have always done things in the past. But the past has quickly become outdated and the business environment we now live in is too volatile not to make adjustments to the way we do business
Robert H.Moberly
General Manager
Moweaqua Farmers Coop
