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2010 Average Price Corn Contract 

  

2010

Average Price Contract Program

Information

 

Premier Cooperative is offering it's patrons an opportunity to establish a price for their 2010 corn crop through an Average Price Contract. The patron commits to a certain amount of bushels (between 10% and 15% of an average yield) to be priced in equal quantities at a specified weekly interval (every Wednessday at the close of business) over a predetermined time frame. (18 weeks from March 3, 2010 through June 30, 2010). Historically, the best prices for new crop corn are obtained between January 1st. and June 30th. (see attached seasonal chart). 

Contract Details

·          All Forward Cash Purchase contract terms and conditions apply

·          Contract minimum of 1,000 bushels required per contract 

·          One forward cash contract will be itriggered from the average price contract at the end of the 18-week averaging period that will need to be signed and returned.

·          A Two cents pre-bushel fee charge to this contract that will be dectuceted from the patrons settlement.

·          Pricing will be every Wednesday at  the closing posted price for the contracted delivery location.

·          Pricing will be deferred until the next pricing date if the posted price is less then the loan price. The bushels will accumulate and be priced at the next pricing date that the posted price is above the loan price. If the posted price does not rise above the loan price before the end of the averaging period, the contracted bushels will be reduced to the priced bushels.

 

        ( Signup must be completed by noon on March 3, 2010.)

 Advantages

·          Reduces the frustration and stress from marketing grain.

·          All emotion is taken out of the marketing decision.

·          Producer receives average forward cash price over a period of time when prices are typically above average.

·          Both basis and futures price will be established each week.

·     Producer still retains a substantial portion of his grain to market.

·          No margin calls or margin requirements.

·          Simple and understandable.

·     Only two cents per bushel opportunity investment.


(We recommend putting no more than 10% - 15% of an average crop to the program.)

 

Disadvantages

·          You may not capture all of the gains during a volatile market.

·          Average cash price may not be profitable or satisfactory.

·     Averaging time period may miss a summer weather market rally.

 

PRISING HISTORY FOR 2010

                           ·  HARVEST (2010)                                                          ·  JANUARY (2011)

                                            DELIVERY                                                                            DELIVERY

·  ·  DATE:          PRICE           ·  DATE:          PRICE          ·  DATE:          PRICE         ·  DATE:          PRICE

·  ·  3-03-10     $0.00           ·  5-05-10      $0.00           ·  3-03-10      $0.00          · 5-05-10     $0.00

·  ·  3-10-10      $0.00          ·  5-12-10      $0.00          ·  3-10-10      $0.00          · 5-10-10      $0.00

·  ·  3-17-10      $0.00           ·  5-19-10      $0.00          ·  3-17-10      $0.00          · 5-19-10     $0.00

·  ·  3-24-10      $0.00           ·  5-26-10      $0.00          ·  3-24-10      $0.00          · 5-26-10      $0.00

·  ·  3-31-10      $0.00          ·  6-02-10      $0.00           ·  3-31-10      S0.00          · 6-02-10      $0.00 

·  ·  4-07-10      $0.00           ·  6-09-10      $0.00          · 4-07-10       $0.00         · 6-09-10      $0.00

·  ·  4-14-10      $0.00           ·  6-16-10      $0.00          ·  4-14-10      $0.00         · 6-16-10      $0.00

     ·  4-21-10      $0.00          ·  6-23-10      $0.00           · 4-21-10       $0.00          · 6-23-10      $0.00

     ·  4-28-10      $0.00          ·  6-30-10      $0.00          ·  4-28-10       $0.00         · 6-30-10      $0.00

 

            ·     Average Price: Harverst (2009): S0.00   January (2010): $0.00

 

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