Fremar LLC

Mission Statement: TO ANTICIPATE, MEET OR EXCEED OUR PATRON'S EXPECTATIONS WHILE PROVIDING LOCAL PROFITABILITY.

Grain - Feed - Agronomy - Petroleum         605-648-3941 or Toll-Free: 800-658-3544, Fax: 605-648-3943
General Manager: Steve Domm                                                      Main Office Hours: Monday - Friday    7:30 AM - 5:00 PM
Main Office: 44608 - 273rd Street, Marion SD 57043                                                                             Closed Saturday & Sunday

	Contracts

BASIS FIXED Contract

FEATURES

* Immediate Delivery * Futures Market Portion Priced at a Later Date * Basis Priced Immediately * Payment Received at a Later Date

DEFINITION

As described by its name, the basis portion of this contract is determined or "fixed" at the time the contract is written. Pricing of the futures portion of the contract can be done at a later date. This is usually restricted to normal futures market trading hours. Payment on this contract is made upon final pricing unless the pricing precedes the shipment period. The basis fixed contract calls for immediate delivery upon entering into the contract.

ADVANTAGES

* Allows the seller the ability to benefit if the futures market rallies before the pricing date on the contract.

* Allows the seller of grain the ability to lock-in favorable basis levels if the seller feels the basis market will decline before pricing the futures market portion of the contract.

* Allows the seller to deliver grain immediately while still waiting to price the futures portion of the contract at a later date.

* Eliminates storage expense inherent in inventorying grain while waiting for a price rally.

* Eliminates the risk of quality deterioration that is inherent with storing grain.

* Allows the seller to move the grain when time and transportation are available within contract terms.

DISADVANTAGES * Does not allow the seller the ability to take advantage of carry charges that may be available in the market.

* Exposes the seller of grain to any potential decline in the futures market.

* Payment is usually not received until grain is priced.

* May expose the seller of grain to quality risk when selling grain that has not been harvested.

* Does not allow the seller of grain the ability to arbitrage markets at the time of delivery.