CONTRACTING OPTIONS
HEDGE TO ARRIVE CONTRACT (HTA)
An agreement that establishes the Chicago Board of Trade price for a specified amount of grain to be delivered to a named location during a specific delivery period. The delivery period cannot exceed 18 months from the contract date. The futures price is the only fixed portion of the price. A service fee of $.06 is charged to write the contract and comes off the initial futures price. A $.04 fee is charged to roll the contract. Final pricing must be completed prior to an agreed upon expiration date or at the time of delivery, which ever occurs first.
Target Price Order
Customer sets a target price that if hit will result in a fixed price contract or a pricing for delayed price bushels or basis contracts. If the target is hit the contract is written or delayed price bushels are settled.
Spot Sale
Bushels delivered for cash/spot sale will receive the closing price on the day the grain is delivered.
Deferred Payment
Customer may elect to defer payment for grain delivered against contracts, bushels priced from dp/open storage and spot sales.
Basis Contracts
An agreement that establishes basis, which is the difference between the Chicago Board of Trade and the local cash grain price, for a specific amount of grain for any delivery period and location. The basis is the only fixed portion of the price. A maximum 80% of the current cash price can be advanced after delivery of the bushels. Farmers may be required to pay back advance to maintain 80% of contract value. A $.04 fee is charged to roll the contract. Final pricing must be completed prior to an agreed upon expiration date.
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