Are the most commonly used contracts. They are used when the cash price has reached your goal with little thought to either futures or basis.
Spot Cash Contract
Forward Cash Contract
Allow the producer to lock in a cash grain price for a specific delivery date and location in the future. This type of contract is preferred to lock in a crop selling price.
Delayed Price Contract
Allow producers a high degree of price flexibility for an extended period of time. A service charge may or may not be used during the marketing year. If a service charge is being used, a price increase must be expected to offset this expense.
Are similar to forward cash contracts in that they allow the producers to lock in a future delivery price, but only partially. The partially fixed price is basis: the difference between cash and futures; with the futures to be fixed at a later time.
Hedge To Arrive Contract
Are the reverse of a basis contract. This contract is typically used when futures are high, and the belief is that futures will drop and simultaneously the basis is wide and should narrow.
Deferred Payment Contract
Are used to defer tax liability to another tax year. Please consult your tax accountant for proper application.