UFC has 8 different grain elevators, and 1 feed mill located in North Eastern Missouri, and Western Illinois. Collectively we have 13 scales, 20 dump pits, a grain receiving capacity of 30,000 bushels per hour and 20 million bushels of storage. We are located on the Mississippi and have 3 river terminals, and truck markets that provide competitive opportunities.
Marketing Tools
Ursa Farmers Cooperative offers the following marketing tool at little to no cost.
Please feel free to stop in or call us to discuss any of these marketing contracts.
- Cash Contract
- Forward Cash Contract
- Delayed Price Contract
- Futures Fixed Contract (HTA)
- Basis Fixed Contract
- Minimum Price Contract
- JSA Contracts
- OTC Contracts
- Deferred Payment Contract
- Grain Bank
Forward Cash Contract
Execution:
- Contract any UFC local elevator to lock in cash price for some time frame in future
- Deliver grain as agreed
- Receive payments
Strategy:
This contract can be used for two different marketing strategies:
- Use the forward contract to lock in a favorable new crop price before your crop is planted or harvested
- The forward contract can also be used to "lock in a carry." The market may pay more for grain delivered at a later date. If the forward price is greater than the current price plus your storage and interest costs, it would be beneficial to lock in the higher price.
Advantages:
- Easy to execute
- Elimates all risk of price decrease
- Ability to lock in the carry
Disadvantages:
- Payment is not received until delivery
- Futures and basis are both locked in
- Inability to participate in a market rally
- Delivery is required
- Potential penalty for cancellation
Futures Fixed Contract (HTA)
Execution:
- Contact your local UFC elevator to establish a delivery date, bushels amount, futures level and pricing time frame
- Deliver grain as agreed
- Establish basis level by pricing date
- Receive paymnet
Strategy: This contract should be used when the futures price is relatively high and the basisi is low. The futures and basis may ofter move in opposite directions.
Advantages:
- Elminates downside futues risk
- Avoids service charges
- Can eliminate storage costs and risks
- Allows pricing flexibility in the basis
Disadvantages:
- May have minimum bushels requirement
- Title of grain is transferred
- Payment is not received until the basis level is established
- Delivery is required
- Open to basis risk
- Requires historical futures and basis knowledge
Basis Fixed Contract
Execution:
- Contact your local UFC elevator to establish a delivery date, bushels amount, basis level, and pricing time frame
- Establish futures price or roll contract by First Notice Day
- Deliver grain as agreed in delivery timeframe
Strategy:
This contract should be used to lock in a favorable basis level and allow time for the futures market to appreciate. Generally, when the futures are low, the basis will be high.
