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SEON | I planted a little wheat last year for pretty much the first time.....67 acres to see how it goes and now I'm about to deliver on the contract.....just wondering what I should expect to be paid.
I booked a basis only contract for 2000 bu of hard red winter wheat with the local elevator on Sept 3 2010 at -1.45/bu.
Locked in futures price on Sept 23 at $7.30/bu (~267/metric tonne).
Elevator mailed me a contract early last month for $270/metric tonne.
So here are my questions:
1. I was expecting a much lower contract price (i.e. $7.30 - $1.45 = $5.85/bu x 36.7 bu/metric tonne = $214.70/metric tonne). Should I expect the basis to come off the contract price of $270 or did the elevator just give me a way better price than I deserved because they forgot to mail me the contract and wheat went up in the meantime?
2. How do they test for the various diseases and how much do they dock for each disease?
3. How does test weight figure into what I get paid?
4. Who does the test for protein.....the elevator?
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wheat price vs what we get paid
