Basis

If you feel there is a potential for future prices to improve, but basis levels may get worse, a Basis grain contract allows you to lock in only the basis portion of a cash contract for a specific delivery period. With the basis set, you can wait until a later date to set the futures reference pricing portion of your cash contract. Basis contracts may also allow you to receive a payment advance on an estimated portion of the contract value for the grain that has been delivered.

Note that entering into a Basis contract does not result in the seller opening a futures or options account or having a futures or options position. Any futures or options position taken by a buyer is for the benefit of the buyer only and shall be in the buyer’s name. Futures and/or options may be employed as a grain pricing mechanism. This contract is not a futures or options contract or a commodity pool agreement.

ADM products and services vary by location.

How it Works

Here’s how Basis works for you:

  1. Working with an ADM representative, you lock in the basis for a specific delivery period.
  2. If you wish, you may be able to receive a partial cash advance after delivery has occurred.
  3. You set your final futures reference price prior to the deadline provided by the contract terms.
  4. You deliver your grain within the contracted period and receive the contracted cash price (minus your cash advance, if applicable), which is the Futures Reference Price +/− Basis.

 

Benefits

  • Helps you actively manage your final grain price
  • Helps diversify your marketing
  • Allows you to take advantage of favorable basis
  • Can improve cash flow, if needed
  • Maintain flexibility in your forward marketing

 

Let's talk.

Please contact me so we can have a conversation about this grain contract.

Email Sign Up - Grain Contracts Single

Contact Information

*Required Fields

Tooltip Option 1 text
Tooltip Option 3 text
Tooltip Option 2 text