This spot sale is an alternative in which grain is sold for immediate shipment at current prices. This alternative is suitable if one believes grain prices will continue to decline.
* Very simple approach to grain marketing.
* Provides prompt payment for grain.
* Allows one to capture favorable prices in markets that are trending lower.
* Eliminates storage and interest costs.
* Eliminates the risk of quality deterioration
* Does not allow the seller to benefit if prices improve in the future.
* Does not allow the seller to capture favorable carrying charges when available in the market.
* Does not allow the seller to benefit from basis appreciation in the market.
EXAMPLE: It is August 1st and FREMAR LLC is posting a bid of $6.25 for corn. You bring in a 900 bushel load of corn and instruct FREMAR to sell the corn and go home with a check in your hand.