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DeBruce offers a
variety of specialty
contracts to meet
the objective of the
Producer or End
User.
An overview of
specialty contracts
is described below.
Contact your DeBruce
Merchandiser for
details of these
specialized
contracts.
Average
Price
Contract
Average Price
Contract allows the
Producer to sell
cash grain at a
price based
on the average
daily future prices
over a set period of
time, plus or minus
the basis. This
allows the grain to
be priced during a
time of historically
stronger
prices.
Average
Plus
Contract
Average Plus
Contract is a
variation of Average
Price Contract. The
Producer
agrees to sell a
new crop quantity of
corn or milo, based
on the seasonally
and historically
attractive March
through June period.
In addition to
pricing
December corn
futures based on the
daily closes of the
March through June
period,
the Producer
receives a
“bonus”
over and above the
average price.
In return for that
bonus, the producer
agrees to sell and
deliver a like
quantity
of new crop
corn/milo, if
December corn is at
or above the
pre-selected
“target”
on a known
“target”
expiration date.
Bonus
Target
Contract
Bonus Target
Contract allows the
Producer to receive
a bonus for one cash
sale
in return for the
commitment for a new
crop sale of the
same quantity, if
certain
requirements are
met. The second sale
has a contingent
pricing plan, and
does
not always require
delivery. The
Producer has the
potential to price
new crop
grain at a level
higher than at
contract inception,
but will not be
obligated
to deliver the new
crop portion unless
certain conditions
are met. In every
case, the bonus
received for the old
crop is retained by
the Producer.
Futures
First
Contract
Futures First
Contract allows the
Producer to
establish and lock
in a favorable
futures price,
while leaving open
the possibility for
basis gains. The
best
time to employ
this strategy is
when the Producer is
bearish, or
satisfied with
current futures
price, but is
bullish on the
basis.
Minimum
Price
Contract
Minimum Price
Contract allows the
Producer to sell
cash grain at an
acceptable
price, and still
have the opportunity
to participate in
subsequent future
market
price increases.
For the equivalent
cost of an
exchange-traded call
option spread,
the Producer has
the potential to
capture unlimited
gains in future
prices up
to the day prior
to the exchange
option
expiration.
Minimum/Maximum
Price
Contract
Minimum/maximum Price
Contract allows the
Producer to sell
cash grain at an
acceptable
price, and still
have the opportunity
to participate in
subsequent future
market
price increases.
For the equivalent
cost of an
exchange-traded call
option spread,
the Producer has
the potential to
capture gains in future
prices up
to a pre-defined
maximum until the
re-pricing
deadline.
Corn
Rebate Purchase
Contract
Corn Rebate
Purchase Contract is
a contract in which
the end user would
buy
a fixed price cash
contract from
DeBruce Grain, but
the opportunity to
“re-price”
that contract and
get a rebate down to
a certain
pre-defined futures
price.
DeBruce Grain
would enter into a
Strategy for a
minimal cost, which
would allow
the buyer to buy
corn at a level
whish they are
satisfied with, but
have the
potential to
re-price at a more
favorable price up
until expiration.
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