Instead of selling your grain at the market price today, the 1×2 contract sets a minimum (floor) and maximum (ceiling) price, with a final pricing date determined at the time of contracting. If prices go lower, you are protected by the floor, and if prices go higher, you maintain participation and may sell additional bushels.
ADM products and services vary by location.
The 1×2 contract can be applied to any new contract today, for bushels to be delivered at a specified date.
You can work with your ADM representative to determine these components:
Performance
1×2 contracts perform according to the formula put in place, referencing a defined underlying futures reference market and price, on a specific pricing date to determine whether or not an additional bushel obligation will occur.
Double-Up Feature
If the market settles above your ceiling price, then double the original contract quantity will be priced at the ceiling price.
