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Grain Division

Maplehurst takes pride in our ability to service our customers. Experienced merchandisers are eager to help you make informed decisions when it comes to marketing your grain with a number of tools at their disposal. We are constantly updating our multiple locations to provide a close outlet for you to deliver your grain and to make your delivery experience as smooth and efficient as possible. Maplehurst is ever changing to meet your needs and provide you with the best service around. Your local elevator manager is waiting for your call to discuss your marketing plans. Thank you for your business.

Ty_Unagst_1

Ty Unangst
Grain Merchandiser
(815) 562-8723
       

Ron_Darin

Ron Darin
Grain Quality Inventory
Product Manager
(815) 562-8723

Mark_McCartney

Mark McCartney
Grain Superintendent
(815) 562-8723
       

 

 

GRAIN CONTRACTS

Maplehurst Farms offer a significant array of grain contracting alternatives as listed below. Contact any of our locations and / or grain buyers to assist you with your marketing plan. Please note these contract types can be used for bushels delivered to the elevator or direct shipments.

 

  • BASIS CONTRACT

  • CASH GRAIN SALE CONTRACT (SPOT)

  • FORWARD CONTRACT

  • FIRM OFFER CONTRACTS

  • PRICE LATER CONTRACT (DP)

  • HTA-HEDGED TO ARRIVE-FUTURES ONLY

  • STRUCTURED GRAIN CONTRACT (SCS)

  • STORAGE

 

BASIS CONTRACT-A basis contract allows you to deliver grain while maintaining some pricing flexibility. It is useful to either capture a historically narrow basis level or move grain while awaiting an expected CBOT rally. The delivery date, quantity, and basis are all established in the contract. The basis is a price level given in cents per bushel above or below the CBOT futures for a specified futures month. The final price is set by fixing the CBOT level during CBOT trading hours.

Basis contracts must be priced before the CBOT delivery month begins (Example: A contract based on the March futures should be priced by the last business day of February). With the prior approval of Maplehurst Farms, a basis contract can be rolled forward to another contract month to offer more pricing flexibility. The basis will be amended by the spread between the two futures months plus a small service charge

 

Customer Advantages

Corn is shrunk to 15% moisture vs. 14% on storage and warehouse receipts.

Down side basis risk is eliminated.

May take advantage of future CBOT rallies.

May avoid a weak (Harvest) basis or low flat price.

Can receive an advance of 80% of contract value. (ex. 4.00 cash price - advance 3.20 per bu)

Quality risk passes to buyer.

Avoids storage or price later charges.

No minimum bushel requirements.

 

Customer Disadvantages

Future basis improvements cannot be realized.

You remain subject to the risk of changes in the CBOT futures prices.

Requires knowledge of local historical basis.

 

CASH GRAIN SALE CONTRACT (SPOT)-In a cash sale contract, you can contract to sell grain at the nearby bid or cash market. The delivery period, quantity, and price are all determined in the contract.

 

Customer Advantages

Corn is shrunk to 15% moisture vs. 14% on storage and warehouse receipts.

Quantity and Price is fixed with no further price risk.

Quality risk is passed to buyer.

Money is immediately available.

 

Customer Disadvantages

Pricing flexibility and delivery are eliminated.

No chance for further price increases.

 

FORWARD CONTRACT-The forward contract is used to lock in a price for grain to be delivered at a future date. The delivery period, quantity, and price are established in the contract. Any variance from the contracted terms must be agreed upon in advance by the buyer and seller.

 

Customer Advantages

Corn is shrunk to 15% moisture vs. 14% on storage and warehouse receipts.

Good market prices can be established when grain in not available for immediate delivery.

Quality, Price, and Delivery can be planned and executed according to your needs.

Income can be deferred.

Simple and easy to use.

 

Customer Disadvantages

Grain must be delivered as contracted regardless of yield or quality concerns.

Not able to participate in any further improvements in either basis or futures.

Payment is not received until grain is delivered.

 

FIRM OFFER CONTRACTS-Firm Offer contracts are used to place orders to sell specific bushel amounts at a pre-determined offered price. Offer contracts have a delivery period set to them, 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.

 

Customer Advantages

Price targets can be reached if you are not able to monitor the markets minute by minute.

Takes advantage of short lived day rallies if your offer is in the quote system.

If you have a price goal in mind, it puts it in writing and gives you something to watch and monitor.

Any price amount and bushel quantity can be offered.

Offers can be used to price cash, storage, or new crop delivery grain.

Offer to sell may be cancelled by seller anytime providing notice has been received by buyer prior to offer being filled.

 

Customer Disadvantages

Grain will be priced at offer, and if market rallies past the set offer, additional gains will not be realized.

Putting offers to sell at even dollar amounts can sometimes be costly, ex. Offer to sell $4.00 corn, and price is $3.99, then market falls to $3.50. Failure to "pull the trigger."

 

 

PRICE LATER CONTRACT (DP)-A price later contract (also known as a Delayed Pricing or No Price Established Contract) allows you to move grain without establishing any price. Charges vary with market conditions. It is important to note, that unlike storage, title to the grain passes to the buyer upon delivery. You will not be able to use Price Later grain as collateral for government loans or Loan Deficiency Payments (LDP).

The service charges are based on market differentials (carries/inverses) and may or may not be less than storage charges.

 

Customer Advantages

Can make delivery while avoiding historically low (harvest) prices.

The emotionalism of pricing is separated from the physical handling of the grain.

Do not need on farm storage and price later may be cheaper than commercial storage.

Quality risk passes to buyer upon delivery.

Corn is shrunk to 15% moisture vs. 14% on storage and warehouse receipts.

 

Customer Disadvantages

Subject to basis and CBOT price risk.

No payment until contract is priced.

This is not STORAGE! Title passes to buyer and you are unable to get a CCC loan or LDP once put into Price Later.

 

HTA-HEDGED TO ARRIVE-FUTURES ONLY-A HTA contract allows the farmer to set the CBOT futures price now and establish the basis at a later date. This allows the farmer the ability to sell grain in deferred months and take advantage of higher futures markets.

HTA contracts must be priced by the 20th day of the month previous to the first day of the delivery month. (Ex. For March delivery, basis must be set by Feb. 20)

 

Customer Advantages

Downside future risk is eliminated.

May take advantage of basis rallies.

The farmer is not responsible for margin calls.

May avoid a weak (harvest) basis or low flat price

 

 

Customer Disadvantages

Fee based on delivery period chosen, which may outweigh basis gains

Upside futures grain cannot be realized.

You remain subject to the risk of changes in the basis prices.

Increments of 5000 bushels required

 

STRUCTURED GRAIN CONTRACT (SCS) 5000 bu. Increments

A version of an HTA, where the price of a future grain delivery at a certain time is specified according to rules determined by the chosen structure. We offer several different styles of SCS contracts that are tailor made specifically to each farmer.

 

MASTER ASSURANCE PLAN-A grain structure that averages grains sales over time at a fixed price.

MASTER DEFERRED ASSURANCE PLAN-A grain structure that will give you a premium today with a chance of matching bushels at  later if the fixed future is at or above on expiration date.

MASTER ENHANCER PLUS PLAN-A grain structure that locks in a fixed price at a higher level because the presence of an additional quantity and a trigger level. (Knockout)

MASTER FENCE PLAN-A grain structure that averages grain sales over time subject to a minimum floor level and a maximum cap level. The final average is adjusted up if the futures price is above the stop protect level.

MASTER FLOOR PLAN-A grain structure that averages grain sales overtime subjected to a minimum floor.

MASTER ORIGINATOR PLAN-A grain structure that averages grain sale over time at a fixed price unless a trigger level is touched, in which case any unaccumulated bushels are priced at original futures price.

MASTER RANGE PLAN-A grain structure that averages grain sales over time subject to a minimum floor level and a maximum cap level.

 

 

 

STORAGE-This option allows you to deliver grain while maintaining ownership. We warehouse your grain, guaranteeing the quality of that grain. Stored grain is upgraded to quality standards to insuring long-term storability. Grain delivered below these standards are discounted and upgraded. You can get a warehouse receipt allowing you to place it under CCC loan or use it as collateral for conventional loans.

 

Customer Advantages

Producer maintains title to the grain.

Risk of Quality passes to the warehouseman.

Can avoid selling at the historically low (Harvest) prices.

Storage may be used as loan collateral and warehouse receipts are available.

 

Customer Disadvantages

Storage costs may be higher than market spreads or other sales strategies.

Discounts and storage charges have to be paid in advance to receive warehouse receipts.

 
 

936 South Moore Road, Rochelle, IL 61068
(815) 562 - 8723 | Fax: (815) 562 - 7543 | Privacy Policy

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The risk of loss in trading commodity futures contracts can be substantial.
You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

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