|
|
 |
|
Pricing Options 03/06/04 9:17:51 AM
Cash Sale
agreement between the producer and Collwest Grain to pay a certain price for a certain quantity and quality of grain.
payment either immediate or can be deferred for tax planning.
Deferred Delivery
agreement between yourself and Collwest Grain to pay a certain price for grain to be delivered at a future date.
useful to lock in a price for new crop commodities.
useful if the price for grain is attractive to the producer now but delivery is not convenient or possible.
the producer's are at risk to grow or store the grain they contract.
price risk and gain is passed on.
Basis Contract
agreement between the producer and Collwest Grain to determine the difference between the futures price and the net price they will receive.
useful if the basis level is attractive, however, the producer believe's the futures level will increase.
while the basis component of the producer's net price is determined the risk and gain of futures price movement is their's. |
|
