|
Portage Des Sioux, MO | I am not exactly sure on your dates or your prices but here is an example of their contract and how it works. Lets just say today we can put up a 25,000 bushel bin for no money out of pocket. In exchange for that bin we OFFER cargill our 25,000 bushel of grain in that bin for the next 3 years. The strike price on that bin is 4.00 March futures on the first trading day of January. CH9 @ 4.00 on 1/2/09, CH0 @ 4.00 1/2/10, CH1 @ 4.00 1/3/11. If the market on each of those dates is at or above the strike price you are obligated to deliver those bushel at 4.00 minus basis. If the market is below the strike price you have a NO PRICE ESTABLISHED contract and are still obligated to deliver but pricing of is determined by you.
So if the market rallies to $5.00 you deliver $4.00 corn but have a bin. If the market drops to $3.00 you deliver $3.00 corn on spot market and have a bin.
I have nothing against Cargill or their programs because they really have some great programs for the right people. They treated me very good when I worked for them for many years. That is not a valid quote just a pretend one I made up in my head.
But there is not a BANKER in the world that will not loan a CORN GROWER money for a bin when you can show him cash carries like we see in this market. 5 - 6 year payoff is a darn good investment. | |
|
Cargill bin program
