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Mercer Landmark, Inc.

 

Mercer Landmark :: Grain :: Cash Plus

What is Cash Plus?

The Cash Plus Contract provides producers with a premium or a "push" in the price of old crop grain in exchange for a firm offer on an equivalent number of new crop bushels at a specific strike price. One advantage of this contract is that it can be done for any quantity of bushels; no minimum of bushels required. In addition, the expiration dates in these contracts can be chosen in a manner that allows producers to know their new crop obligations prior to harvest.

One advantage of this contract is that it can be done for any quantity of bushels; no minimum of bushels required. In addition, the expiration dates in these contracts can be chosen in a manner that allows producers to know their new crop obligations prior to harvest – a critical factor in everyone’s marketing plan.

This product helps level out price risk with alternative cash contracts that simplify both decision-making and execution. Cash Plus Contracts price themselves over a specific period of time and are simply initiated by signing up current bushels.

CASH PLUS CONTRACTS OLD CROP '17 CORN

 

Cash Plus Contract—Example
Current Old Crop Cash Bid/Contract Price: $3.85
Strike Price $4.15 March 2019 Futures
Expiration Date: February 20, 2019
Premium $0.12
New Old Crop Cash Bid/Contract Price with Premium added: $3.97
Committed Bushels 3,000
Cost $.02
(service fee which will be deducted from final pricing)
   
Potential Results
Scenario 1: No additional obligation
If the market closes below $4.15 on February 20, 2019 only the original 3,000 bushels that the $.12 premium was added to & delivered on will be owed. No additional bushel obligation is due.
Scenario 2: Double Up
If the market closes at or above $4.15 on February 20, 2019 a second set of 3000 bushels is owed at the Strike Price ($4.15) +/- current basis levels.

 

Contact us for more details:

 

Anna Kaverman
Grain Originator
(419) 769-5403

Angie Bohman
Grain Originator
(567) 644-4605
Jerry Meyer
Grain Originator
(937) 441-0924
Jackie Sheridan
Grain Originator
(419) 852-8233

 


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