Specialized Grain Contracts For Individual Needs

Priced Contracts

Priced contracts are fixed, meaning they have specific delivery requirements and no flexibility on final price.

Advantages of a Priced Contract:

• No further price risk
• Quality risk is passed to the buyer upon delivery
• Funds are available after the contract has been completed 

With this contract, pricing flexibility and delivery are eliminated and there is no chance for further price increases.

Basis Contract

Board price must be set prior to expiration date in the contract. Basis contracts may be rolled forward to another board contract month, at the spread between the futures months, plus a fee for a contract change.

Advantages of a Basis Fixed Contract:

• Downside basis risk is eliminated
• No minimum bushel requirements
• Producer can receive an advance up to 70% of current market value
• Producer avoids storage or basis later charges

If this contract is chosen, the future basis improvements cannot be realized. You remain subject to the risk of changes in the CBOT futures prices. This contract also requires knowledge of local historical basis.

*Offerings subject to change without notice. The above contracting tool involves market risks and may not be appropriate for all producers.

Hedge-to-Arrive (HTA)

At the time of an HTA contract, the board price is established, and final price is then determined when the basis is set. The basis must be set prior to time of delivery or before the contract expiration date.

The HTA contract takes advantage of high futures levels, leaving opportunity for basis to improve. Futures downside price risk is eliminated, and the producer has no margin calls or exchange fees.

Advantages of an HTA contract:

• High Future Levels allow opportunity for basis to improve
• Futures downside price risk is eliminated
• Producer has no margin calls or exchange fees

When an HTA contract is chosen the producer is open to the basis-level getting worse, cannot take advantage of futures rallies and cannot trade in and out of HTA contracts as with futures contracts. The delivery of the contract is mandatory, and payment is not received until basis is set and the grain is delivered.

*Offerings subject to change without notice. The above contracting tool involves basis risk and may not be appropriate for all producers.

Minimum Priced Contract

A Minimum Priced Contract establishes a guaranteed base price protecting a producer against lower prices but permits participation if the market rallies. The final price will be the minimum price plus any value the option provides if the market rallies prior to the expiration of the option.

The advantages of a minimum price contract:

• Risk of CBOT futures price decline is eliminated yet allows the opportunity to participate in higher futures prices if the market moves higher prior to the contract’s expiration date.
• Minimum price is guaranteed and paid in full upon completion of delivery.
• No upfront premiums

 This contract requires selling in 5,000-bushel increments.

*Offerings subject to change without notice. The above contracting tool involves market risks and may not be appropriate for all producers.

Delayed Pricing

A Delayed Priced Contract allows a producer to move grain to a Co-Alliance location without establishing any price. Charges are subject to market conditions.

Advantages of a Delayed Pricing Contract:

• Ability to avoid historically low harvest prices
• Emotions are removed from the physical grain handling
• Producer does not require on-farm storage
• May be cheaper than commercial storage
• Quality risk passes to buyer upon delivery

Unlike storage, title to the grain passes to the buyer upon delivery.
Delayed Pricing contracts are subject to basis and futures price risk.

*Offerings subject to change without notice. The above contracting tool involves market risks and may not be appropriate for all producers

Price Target Offers

A Price Target Offer contract takes advantage of short-lived day or night rallies. If a price target contact is chosen the grain will be priced at an offer, and if the market rallies past the set offer, additional gains will not be realized.

Advantages of Price Target Contracts:

• Price targets can be reached without minute to minute market attention.
• Price goals are realized through contract
• Offers to sell may be canceled by producer at any time, so long as notice has been received by buyer before offer is filled.

*Offerings subject to change without notice. The above contracting tool involves market risks and may not be appropriate for all producers.

Structured Grain Contracts

Structured grain contracts are cash contracts designed to meet the producer’s specific pricing needs.

Advantages to a Structed Grain Contract:

• Contracts are customizable and are tailored to fit the producer’s risk tolerance and price biases.

Structured grain contracts do involve some added risk such as double-up and knock-out. The producer’s risk is reflected in the price requested.

*Offerings subject to change without notice. The above contracting tool involves market risks and may not be appropriate for all producers.

Managed Bushel Programs

Managed Bushel Program contracts remove the emotion from selling by placing marketing decisions in the hands of algorithmic-driven deep market artificial intelligence or human traders with years of proven trade expertise. 

Advantages of Managed Bushel Programs:

• Selling decisions are made based on years of acquired analytical data
• Plans are evaluated using marketing plan benchmarks

*Offerings subject to change without notice. The above contracting tool involves market risks and may not be appropriate for all producers.