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SC Iowa | 1) Does your contract spell out a cancellation policy?? If so, is that based on buying out at anytime you choose, or only after you have a proven production shortfall. Many grain businesses are reluctant to let producers exit contracts unless the shortfall is a known fact.
2) If I am interpreting your comments correctly, the buyout is the difference between your contract price "and the current price" plus a ten cent cancellation fee?? Is that "current price" the posted bid for your delivery period or "replacement cost"......those can be two completely different prices by as much as 10-40 cents.....
If you fail to reach agreement on the buyout, you could choose to buy wheat futures which would cap your upside exposure.... | |
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forward cash contract sales
