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Contracts 

SPOT SALE 

DEFINITION
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.

ADVANTAGES
* 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 
 
DISADVANTAGES
* 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.

 
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