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Grain Marketing Programs and Contracts
Cash Contracts
Cash Sale
Lock in a cash price, also known as the “spot price” (futures price + local basis). This contract can also be for future delivery.
Basis
A basis contract establishes a price based on difference between the cash price paid for your grain and the futures price.
Hedge to Arrive
The Hedge to Arrive (HTA) contract, also referred to as a Futures First contract, allows you to lock in the futures portion of a cash contract ahead of the physical delivery, thereby allowing the basis portion to float with the market and potentially improve. You set the basis price converting the HTA to a full cash price at any time prior to delivery.
Managed Contracts
Producers' Edge
In the Producers’ Edge program, working with Gavilon, you select the delivery date, and enroll bushels of eligible commodities in the program—and let our market professionals help manage the futures reference price for you.Visit here
Under the Producer’s Choice program, you deliver your eligible commodities on a fully priced contract. You then can receive up to a 70% advance of the contract price while still being able to participate in potential futures market movements.Visit here
Structured Contracts
Average Price
Uses a simple average of the futures closing prices during a set period to determine your contract's final futures price.Visit here
Minimum Average Price
The Minimum Average Price contract allows you to establish a minimum futures price level and participate in any potential market rally during a defined averaging window. Every day during a preset averaging period an equal number of bushels are priced, and all bushels enrolled end up priced by the end of the averaging period. At no point in the averaging period will a daily pricing level be below the minimum price. If the futures price settles below the minimum price on that day, the minimum price level is used for that daily pricing. However, if the futures price settles above the minimum average price, the higher price is used for that daily pricing. At the end of the averaging period, the contracts final value is a simple average of all daily pricing results.
Minimum/Maximum Average
The Minimum/Maximum Average Contact contract is similar to the Minimum Average Price contract, allowing you to choose a minimum price but also establishes a maximum price. This contract also prices in daily increments by comparing each day’s futures settlement price against the minimum and the maximum price levels. Gavilon also provides a version of this contract with Auto Price-Out—ask your local merchandiser for details.
Minimum Price
With the Minimum Price contract, you control the timing of pricing of your grain while simultaneously purchasing a call option for potential upside participation in the futures price movement. You determine which call to buy.
Bonus Target
This contract is a firm offer tied to a sale of a specified quantity of old crop grain at the local cash price, generating a bonus to be paid at time of cash settlement. The offer level and the bonus amount are determined by your choice of target futures price and target expiration date. Grain under the firm offer is delivered to Gavilon only if the futures price on expiration date is equal or above the target futures price.
Daily Plus Target
The Daily Plus Target contract gives producers the opportunity to establish a forward book on new crop production, while also setting a guaranteed floor with upside potential—subject to market price and other factors. This contract has multiple versions, so ask your local merchandiser for more details.