PROTECTING THE FUTURES COMPONENT OF GRAIN PRICING

Grain pricing has three components being; Futures, Basis, and Currency. Movement in the futures market typically have the biggest impact on grain prices.

Strategies available to growers to manage the futures component of their pricing include:
– Hedging
– Bank Swaps
– Buying Put Options
– Forward Selling

Sam Grieve from FlexiGrain, explains in this clip why Put Options are Flexi Grains preferred options when managing the futures component of pricing.

“Put options are low risk. They have a known fixed cost, and importantly they enable growers to still participate in any upward movement in futures markets.”

Sam Grieve, Flexi Grain.