11/09/18 1:12:36 PM|
Sales and Contracting
Spot and Cash sales are those sales that are made at a specific time and price. We do offer you the option to use our offer sheet which allows you to leave us a specific price and execute that sale when the market hits that level. Offers have been a popular alternative for both our cash contracts and Future Fixed contracts.
Future Fixed Contracts are used when the producer wants to set the futures price and apply a basis at a later date. These may also be referred to as Hedge-to-Arrive. These contracts do have service charges and some specific trading rules that Prairie Grain follows very closely to stay within FTC guidelines as well as our own to protect our company and customers. As a quick review the guidelines are simple. We allow only one roll per contract within the crop year. No rolls outside of the crop year. All these contract are basis delivery of the actual commodity and can not simply be cancelled by “buying out” the contract. Basis is generally set prior to delivery and must be set on the last business day prior to taking the cash market to the next option month. An example of this would be using a December hedge month; basis would be set prior to delivery or the last business day of November. Our Future Fixed contracts do have a fee per bushel and that fee may vary depending on futures price and risk.
Basis Contracts are used when a producer wants to set the basis, (difference between cash and futures), in advance of setting futures. These contracts may gain in popularity as we move forward and domestic demand creates more variations in local demand. Today there is a service fee of .02 on a Basis Contract.
Deferred Payment contract allows you to deliver, settle, yet take payment for the commodity at a later date, up to 2 years.
Delayed Priced Contract allows you to deliver the commodity and price at a later date. This contract will change ownership from you to Prairie Grain yet allows you to establish the price using the current cash market at a later time. There may or may not be service charges on Delayed Price Contracts depending on the program set forth by Prairie Grain. Delayed price grain cannot be applied to current or later contracts.
FUTURES FIXED CONTRACT SERVICE FEES
CORN Total Fees
|Jul-19 || .02/bu. |
|Dec-19 || .04/bu. |
|July-20 || .06/bu. |
|Dec-20 || .08/bu. |
SOYBEANS Total Fees
ALL MINI CONTRACTS ARE AN ADDITIONAL .02/BU
|Jul-19 || .04/bu. |
|Nov-19 || .06/bu. |
|July-20 || .08/bu. |
|Nov-20 || .10/bu. |
ALL FUTURES FIXED CONTRACTS WILL HAVE A .02/BU SERVICE FEE THAT IS COLLECTED AT SETTLEMENT
1 ROLL PER CROP YEAR
NO ROLLING OUTSIDE THE CROP YEAR DUE