Forward Cash Contract:
1. Service Fee: None
2. Rolling Fee: 5 cents per bushel at buyer’s discretion.
3. Production Period: 1 crop year.
4. Delivery: Required
5. Contract Cancellation: 5 cents per bushel plus market difference at buyer’s discretion.
Act of God only
Cash Minimum / Maximum Contract:
The goal of the Cash Minimum / Maximum Contract is to lock in a cash floor price while providing for upside market potential. There is a limited upside potential (Maximum Price) with this contract. The minimum price is increased by selling the maximum price. The price of the contract is the difference between the floor option price and the sold call option for the specified delivery period.
The producer risk will be limited on the downside to the minimum price. On the upside the producer has limited potential gain.
1. Service Fee: 3 cents per bushel for purchase of the options
2. Rolling Fee: 1 ½ cents per bushel one side (only in current market year).
3. Market Loss: Payable
4.Production Period: Cash Put Min-Max should not exceed 30% of 1 year’s production.
5. Delivery: Required
Hedge-to-Arrive Contract – HTA
This tool lets you lock in a futures price but not a basis level:
It is used when futures price meets your objectives but you expect further basis appreciation.
A futures price and option month is established, and then buyers have the option to establish the contract basis to be used for final pricing on or before delivery of grain.
DELIVERY INTENT:
Physical delivery of the grain is required. A Contract Delivery Period must be
specified at the time the Hedge to Arrive is put on (example: Fall, December, Jan etc.).
BASIS:
Basis must be fixed “On or Before Delivery” unless arrangements have been made with the buyer.
If arrangements have been made with the buyer then Basis must be set by “First Notice Day”
(FIRST NOTICE DAY SHALL BE THE BUSINESS DAY PRIOR TO THE FIRST BUSINESS DAY OF THE DELIVERY (OPTION) MONTH.
ROLLING OF HEDGES:
Rolling of Hedges will only be allowed at the buyer’s discretion and shall never be rolled into
another crop year. All applicable cost and fees will be charged and/or credited to the seller.
FEES: Current Crop Year Hedges . 03 cents/bushel
1 Year forward Crop Year Hedges .04 cents/bushel
2 Years Forward Crop Hedges . 05 cents/bushel
3 years and forward: Futures will be averaged each year and for every .50 cent market rally a .03 cent fee will be assessed.
The position will be reviewed periodically and adjustments may be made at buyer's discretion.
An additional .03 cent / bushel fee shall be charged to roll hedges
Put Cash Contract
The goal of the Put Cash Contact is to lock in a futures floor price with no basis established, while providing for upside market price potential.
The Contract Price is the futures price chosen (strike price) less the cost of locking in the floor (cost of the put) less aservice charge. The net Cash Sale would be the Futures Strike price, less the cost of the option, less service fee, less basis at time of pricing.
The risk to the producer is known at the time of making the contract and is limited to the cost of locking in the floor (cost of put) plus any service fees.
1. Service Fee: 1 ½ cents per bushel for purchase of option.
2. Rolling: 1 cent per bushel for option roll (only in current market year)
3. Market Loss: Pay, when rolled
4. Production Period: 1 year
5. Delivery Required
6. Contract Cancellation: 5 cents per bushel plus market difference at buyer’s discretion.
Act of God
Cash Call Contract
This tool is an option based contract which protects a Forward Cash Contract with upside market potential protection using a call option.
1. Service Fee: 1 ½ cent per bushel for purchase of the option
2. Rolling: 1 cent per bushel for option roll
3. Market loss: Pay when roll
4. Production Period: 1 crop year
5. Delivery: Required on all Contracts
Contract Cancellation: 5 cents per bushel plus market difference at buyer’s discretion.
Act of God
Basis Contract
This tool allows producers to lock in desired Basis level with the option to establish futures at a later date.
The risk to the producer is potential basis appreciation.
1. Service Fee: None
2. Rolling Fee: 2 cents per bushel each roll to deferred months plus or minus spread difference, to be priced within one calendar year.
3. Market Loss: When contract is priced and filled.
4. Production Period: 1 crop year
5. Delivery: Required on all Contracts
6. Advance: Up to 80% after grain is delivered when price gets below the advance, the producer will be billed.
Price Later Contracts
This tool is used where the seller delivers the grain and has until some later date to establish a price.
This is used when the buyer physically needs to move the grain but doesn’t necessarily have an established price.
Payment is made in full when grain is priced.
Upon delivery, title of the grain passes to the buyer. This is not to be confused with storage or warehouse receipt.
A Price Later Contract will be issued to the producer after receipt of the grain and must be sign, dated, and returned
To the Elevator within 30 days of the last day of delivery. Failure to follow this procedure will result in sold bushels.
The producer will be notified of the sale and settlement will be made.
1. Service Fee: Flexible (Rates may vary for Harvest delivered grain and forward delivery months).
