08/16/12 12:27:15 PM|
PRICE LATER CONTRACTS:
PRICE LATER IS TEN (.10) CENTS FOR FIRST 90 DAYS AND THREE (.03) CENTS A MONTH AFTER.
MUST BE PRICED ON CASH BID BY 09-30-2012. YOU MUST SIGN CREDIT SALE CONTRACT BEFORE DELIVERY.
HTA contract fees are 7 cents per bushel for the 2012 crop year.
HTA contract fees are 10 cents per bushel for the 2013 crop year.
The fee will be deducted from the futures price and you will receive a net futures price on your HTA contract.
A minimum of 5000 bushels and in increments of 5000 bu is required for this contract.
This contract can not be rolled to a new crop year or past the July contract month of that year.
A limit of one (1) contract roll per year will be allowed at a 1 cent per bushel fee.
Must be priced during Chicago Board of Trade trading hours.
Contract Types and Descriptions:
Cash (Spot) - Probably the most commonly used contract. Through this type of sale a producer receives the spot price at the end of the day of delivery. The only arrangements needed prior to delivery are that you are register in our computer system. The producer can choose to receive payment for their grain.
Forward Delivery Contract - The Forward Delivery Contract allows the producer to lock in an elevator's deferred cash grain price. It locks in both futures and basis and setting the delivery period. This contract is used mainly to establish a new crop selling price.
Basis - A Basis Contract is priced in two distinct steps. The initial contract specifies the bushel amount, the delivery period and the "basis" relative to a particular futures option month. This contract allows the seller to partially lock in a future delivery price. The part of the price that is fixed is the basis. The "Basis" is the difference between the cash price and the futures on the CBOT. The futures price is to be set at a future date. Delivery of grain can be made without pricing the CBOT futures price.
Price Later (or Delayed Price) - The Priced Later Contract, also called Delayed Price, or No Price Established, allows a high degree of price flexibility for an extended period of time. Price Later is an un-priced contract whereby you deliver the grain and have until a later date to establish the final flat price. A service charge may apply. Also, title of the grain passes upon delivery to the elevator.
Futures Only (or Hedge-to-Arrive) - The Futures Only Contract, like the basis contract, is priced in two distinct steps. The initial contract establishes the bushel amount, the delivery period and the futures price. The basis then must be locked-in prior to delivery. Once the basis has been locked-in, the contract becomes a cash contract. A service charge will usually apply.
Minimum Price - Minimum Priced Contracts are a very safe opportunity for the producer to participate in market movement for further profit. The producer should use this when anticipating a favorable market move which will enhance his base price while protecting a minimum price should that move not materialize.