In aust we have deliverable fixed or multi grade contracts with spread prices usually done at time of contract execution. Last year in 2010 we cleaned up locked in $330 apw and the spread down to feed was minus $40 at harvest last year everyone had feed due to rain and was worth about $230 port so we had a win.
If you cant deleiver some contracts have a set wash out figure, others you have to find grain to supply if you have contracted at good price its not a issue.
Many favour commoditity swaps with banks which are basically futures position with banks carry margin calls unil expiry then farmer either pays the bank or bank pays the farmer. Of course they take a small % to cover risk.These are non deliverable and can get in and out 3 times during swap life if you wish. Alot of guys use swaps and then just deliver to pools and add swap profit to pool payments.
burbert,tom,stubble,franny and wilargro, the whole lot of you should go on a farm tour somewere east and have a molson together at a strip club and bury the hatchet and settle your differences.
If you cant deleiver some contracts have a set wash out figure, others you have to find grain to supply if you have contracted at good price its not a issue.
Many favour commoditity swaps with banks which are basically futures position with banks carry margin calls unil expiry then farmer either pays the bank or bank pays the farmer. Of course they take a small % to cover risk.These are non deliverable and can get in and out 3 times during swap life if you wish. Alot of guys use swaps and then just deliver to pools and add swap profit to pool payments.
burbert,tom,stubble,franny and wilargro, the whole lot of you should go on a farm tour somewere east and have a molson together at a strip club and bury the hatchet and settle your differences.
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