Contracting Options

CHS Prairie Lakes offers numerous grain marketing options to fit each unique producer and the current market prices.   The below list is just an overview; please talk to a member of our grain team for additional information and assistance determining which options are best for your operation and today’s markets.

Basis Contract

The producer decides on a month to deliver and our team writes a contract for the basis of that month, with futures set at a later time. This would be used when you think the futures are going to go up.

Hedge to Arrive (HTA) Contract

This would be setting the futures against an option month and then at a later time setting the basis.  Our team would use this contract when we think basis is going to narrow.

Minimum Price Contract  

In this contract you sell the grain and buy an option with it.  It allows the farmer to stop storage on any grain and generate some cash while maintaining a position in the market.  It works well in a year where there is not a lot of support for markets to go up.  Get an explanation of the contract from Nick Paumen.

Compass Contract – Cash Plus Contract

This allows you to take a premium on cash grain for a firm offer on additional set of bushels. Get an explanation of Compass Contracts, including Cash Plus, from Gerald Rust.

Compass Contract – Daily Price Plus Contract

This contract prices equal bushels daily above the market.  If the futures market drops below your trigger price, the remaining bushels will be priced at the floor.  If the futures price is above your target price on the day of expiration, you would owe the same amount of bushels at the target price.  Get an explanation of Compass Contracts, including Daily Price Plus, from Gerald Rust.

Compass Contract – Price Builder Bonus Contract

This contract prices equal amounts of grain daily above the market.  If the futures drop below the knockout price, the contract ends.  If the futures price is above your target price on the day of expiration, you would owe the same amount of bushes at the target price.  Get an explanation of Compass Contracts, including Price Builder Bonus, from Gerald Rust.

 

CHS Average Price Contract

This is an average contract for July futures and new crop.  Bushels enrolled in this program will be equally divided and priced at the close of each trading day, taking advantage of the daily price while leaving some upside potential, all at a minimal cost.

CHS Pro Advantage Contract

This contract allows producers to diversify their marketing while taking the emotion out of selling.  It’s a way to take advantage of professional pricing for a portion of their crops using trading experts with a track record of success based on deep market intelligence – especially during times of volatile or low priced commodity markets.  Enrollment period for corn, soybeans, and spring wheat bushels is September 19, 2016 through December 14, 2016.  Click on the contract title for more information.  Get an explanation of the contract from Tim Guza. 

© 2017 CHS Inc.