Contracting Options

Fixed Price Contract: Lock in a specific number of bushels at a set price for a set delivery period.

• Pros: Know the price that you will receive.
• Cons: If the market rallies the bushels are no longer participating.

Basis Contract: Lock in basis on a set number of bushels for a specific delivery period. Gives the ability to set futures at a later date. This contract can be rolled for a 1 cent fee +/- spread.

• Pros: Capture strong basis levels with the possibility of seeing stronger futures.
• Cons: Since futures are not locked if futures drop the final cash price will drop as well.

Hedge to Arrive (HTA): Price futures for a set futures month when futures are at an attractive level. It eliminates futures risk and basis is priced at a later date. This contract can be rolled for a 1 cent fee +/- spread.

• Pros: Capture higher futures prices and allows to capture gains in basis.
• Cons: If basis continue to weaken the final cash price will be lower.

Minimum Price Contract: Lock in a floor price, similar to a fixed price contract, and purchase an option but are still able to participate in the market if prices rise. Must be 5000-bushel increments. There is a 5-cent service fee for this contract.

• Pros: If the market rallies there is potential for a better price on the contracted bushels.
• Cons: There is a cost to purchase the option and if the market doesn’t rally the premium of the option is lost.

Average Price Contract: Allows the commitment of a set number of bushels that will be evenly priced every day from April 1st through July 31st. There is a 3-cent service fee on corn and a 5-cent service fee on beans.

• Pros: It allows someone else to manage the pricing of the bushels over the entire period.
• Cons: If the market spikes the bushels have already been committed to an average price.

Feed Corn Contracts: Any remaining corn balance at the end of the contract will be billed out and placed into grain bank, which will accrue storage.

DTN Portal Offers: Free service that can be used to make grain offers as well as receive bids and location updates.