Grain prices can fluctuate significantly on a day-to-day basis. An ADM Price Daily grain marketing contract helps you manage volatility by pricing equal amounts of grain over a customized time period. You set the contract parameters that best complement your risk portfolio, including the option to add a floor to protect your downside.
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How it Works
The Price Daily contract prices an equal portion of your contracted bushels each day during the pricing period at the closing futures reference price. Your final futures reference price is equal to the average daily closing price.
You can add a floor price to protect your downside. Should the market dip below that floor at close, your grain will be priced at your floor price that day. You can also add a ceiling price to lower your service costs. In this case, on any day the market closes above your ceiling, your grain will be priced at your ceiling prices.
Taking advantage of a Price Daily contract is easy:
- You choose the number of bushels you want to price, the pricing period and a delivery period.
- You decide if you would like to add a floor or ceiling price component to the daily pricing activity.
- When the pricing period concludes, your Final Futures Reference Price is established on your contract.
- You set the basis at any point prior to delivery.
- You deliver your contracted grain and receive a final cash price. Your final price is equal to the Final Futures Reference Price +/− Basis − Service Fee.
- Manage market volatility
- Execute your marketing plan with discipline
- Price Daily can be customized based on your risk threshold and price targets
- Helps diversify your marketing plan
- Minimize stress and worry with automatic execution