Offer Contracts  10/18/11 4:09:22 PM

Offer contracts are used to place orders to sell specific bushel amounts at a pre determind offered price.  Offer contracts have a delivery period set, and can be used for grain in storage or grain to be delivered off the farm.  Offers can be set for any amount of time, from a day offer to many months at a time.  Offer contracts can be cancelled at any time with adequate notice of cancellation.

Offer Contract Advantages:

  • Price targets can be reached if producer cannot consistently monitor the markets.
  • Takes advantage of short day rallies.
  • Any price amount and bushel quantity can be offered.
  • can be used to price cash, storage, or new crop grain
  • May be cancelled by seller anytime providing adequate notice has been given prior to offer being filled.

Offer contract Risks:

  • Grain will be priced at offer, and additional gains will not be realized if the market rallies past the set offer.
  • Offers to sell at a certain price can sometimes be costly.  Example, if offer is placed at $4.00 and the current price is $3.99, then market falls to $3.50.

 

 
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