Common Contracts
1 similar Minimum Price Contract contracts
Minimum Price ContractMinimum Price Contract • March 14th, 2012
The goal of a minimum price contract is to allow producers to set a minimum price received while still having the opportunity to realize a gain in a rallying futures market. A minimum price can be set anytime from contract inception to a date specified in the contract. The minimum price is equivalent to the current cash price less the option premium and the service fee. A Minimum Price Contract gives the producer flexibility by allowing the producer to receive a 100% advance equivalent to the minimum price and the opportunity to realize a further gain with a positive futures market move. This type of contract is a good opportunity for producers who want to protect themselves against falling prices but still have the opportunity to take advantage of an increase in futures prices. Title of the grain passes upon application to the contract. AgMark has X cent/bu service fee on Minimum Price Contracts and requires increments of 5,000 bushels.
