In an effort to improve our service to you, we have compiled a brief description of our grain marketing programs. Hopefully, this will assist you in marketing your grain. If you have questions, feel free to call our office and we will be happy to answer them.
1) CASH SALE: Deliver and sell your grain at the day's posted price. We can usually write you a check the same or next day.
2) FORWARD CONTRACT: Price now for later delivery and payment. Payment is made upon delivery.
3) DEFERRED PAYMENT CONTRACT: Payment on cash sales or advance bookings may be deferred. An interest premium will be added for deferred payments. Mainly used to defer income to next year for tax purposes. See current year program for premiums.
4) TARGET CONTRACT: Set the price you want for your grain. When and if your price is reached, your grain is sold.
5) BASIS CONTRACT: Deliver now, price later at a specified difference to the CBOT futures price. You lock in only the basis and leave the flat price open. Basis is the difference between the local cash price and the CBOT futures contract price. This is often referred to as an unpriced contract and allows you to take advantage of any improvement in the futures prices after the contract is written. However, you are at risk should the futures market decline. You have the option to draw a cash advance of approximately 80% of the value upon delivery. Basis contracts may be left unpriced for a period of time with no storage charge assessed. In order to leave the contract unpriced, it may become necessary to roll the contract to a more distant futures month. When rolling a basis contract to a more distant month, a spread adjustment will be made for the difference between the futures month on which the contract is based and the new futures month. It is our policy to have all basis contracts either priced or rolled prior to the last business day of the month preceding the futures month on which the contract is based. Any contract not priced or rolled within the above time frame will automatically be rolled and the appropriate spread adjustments made. Basis contracts cannot be rolled to the next crop year. Any pricing or rolling of basis contracts must be made when the CBOT is trading. A service charge of 1c per bushel will be deducted when rolling a basis contract.
6) HEDGE-TO-ARRIVE CONTRACT: Often referred to as a Futures Only Contract. You lock in the CBOT futures price for the delivery month selected. The basis and final cash price is established at a later date, prior to but not later than first delivery. Rolling to a different futures month or crop year is not allowed. This is a cash contract and delivery is required. Contracts must be made in 5000 bushel increments. A service charge will be deducted when final pricing is made. Check with us for current service charges.
7) MINIMUM PRICE CONTRACT: Options on futures contracts offer you a very innovative and flexible marketing tool. This program allows you to lock in a minimum price on your grain and still profit should the market move significantly higher. You are protected from adverse moves in the futures market and the worry of margin calls is eliminated. This program requires a minimum of 5000 bushels be sold. This contract can be written as a forward contract for later delivery, or can be written when grain is delivered and sold. A service charge of 1c per bushel is due at time of contract in addition to the option premium.
8) DEFERRED PRICING CONTRACT: Deliver now, price later at our then current price. See current year program for D.P. minimum charges and dates.
9) TOP TIER MARKETER PROGRAM: Take the stress, emotion, and guesswork out of grain pricing by using one of our DRC pricing tools, powered by E-Markets. With each pricing model, you choose the amount of grain to enroll, the time period over which you want to sell, and other pricing parameters. Please visit our website or contact our office for more information.
10) OPEN STORAGE: No open storage program available. All grain must be cashed out or contracted upon delivery.
CONTRACT CANCELLATION TERMS: Farmers Supply is involved in the grain market as buyers and sellers of actual grain. We do not function as futures brokers. Therefore, we must do everything we can to see that contracts are filled in order to fulfill our own commitments. Customers who realize they will be unable to fulfill their contracts should contact us immediately. This will allow us to cancel the contract in an orderly fashion and work out a settlement plan, if necessary.
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