Grain Marketing

At Landus, we offer a wide variety of grain marketing alternatives to meet the needs and preferences of our farmer-owners and customers.

To view the full contract, please provide your email address when prompted. If you are a Landus member, please log in to your account where you can contact your Account Lead or contact the GROW Solutions Center at (515) 800-4769 (GROW).

This decision matrix is designed for producers who have a strong opinion on where futures and basis are going to go. With more than a dozen marketing alternatives, choose the right program for your marketing plan.

EXAMPLE: If you believe futures will rally and basis will weaken, then you should be doing a Basis Only Purchase Contract, Minimum Price Contract, or Extended Price Contract. (See the top left quadrant.)

Alternatives

Landus offers a variety of other marketing alternatives for a diverse approach to marketing your grain.

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Basis Weakens
Futures Increase Contracts

Basis Only Purchase Contract

This contract prices or “locks” the basis level for the chosen deferred period. Using this contract leaves futures unpriced, exposing the producer to either upside opportunity or downside risk in futures price movements.

It is important to note that the set basis level is always tied to the time of physical delivery and location. This will dictate what basis level is used.

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Minimum Price Contract

This contract establishes a minimum price or price floor.

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Extended Price Contract

This contract is specifically designed for those producers that would like to avoid or stop storage and “remain in the market.” Upon delivery, the producer sells at the current price and then chooses the futures reference month and locks in their futures reference price.

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Bonus Premium Contract

This contract is used to enhance a cash price. The producer receives a premium for grain sold today in exchange for a potential additional sale for a deferred timeframe.

If the potential additional sale is triggered, the producer will sell a quantity equal to the amount of cash grain originally sold. The additional sale is triggered if the referenced futures month is at/above the offer level at expiration. If the referenced futures month settles below the offer level at expiration, no additional sale is triggered and delivery is not required.

Increments of 5,000 bushels required. Can be used with corn or soybeans.

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Basis Strengthens
Futures Increase Contracts

Warehouse (Open) Storage

This contract allows the producer to physically move grain while maintaining ownership of the grain.

Warehouse (Open) Storage is much like “consignment.” We hold onto your grain until you are ready to sell it. The producer retains title to the grain. Corn is shrunk/dried to 14% moisture so Landus can guarantee quality.

A “warehouse receipt” can be written for grain on warehouse storage. Producers may take loans out against warehouse receipts as a way to help cash flows.

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Price Later Contract

This contract allows the customer to physically move grain without having to sell or price the grain.

Price Later is available all year long, but it is most popular during the spring and summer months if the service charge is free. During the harvest window, Price Later has one distinct advantage over Open Storage: corn is shrunk and dried to 15% vs. 14%. However, title of the grain passes to the buyer on a Price Later Contract. Fees and minimum charges vary by market conditions —however, they are often comparable to storage charges. Many times, Price Later contracts have slightly higher daily charge rates. During the post-harvest window, Free Price Later often becomes available. This allows the producer to move grain without committing to a price, which in turn passes grain quality risk to the elevator.

This is a credit sale contract.

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Offer Contract

This contract allows the producer to work targeted price levels on all cash or forward sales.

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Basis Weakens
Futures Decrease Contracts

Cash Sale Contract

This is what grain is worth “today.” These contracts are used to sell grain that is at Landus on Warehouse (Open) Storage, Price Later, or for grain that is to be delivered. The advantage of selling corn before putting it on storage is that sold corn is shrunk to 15% moisture instead of 14% after being placed on storage.

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Forward Sale Contract

This contract allows the producer to sell grain for a future delivery period.

Both futures and basis are locked in the contract along with the quantity of bushels. These contracts are very useful for locking in attractive prices ahead of delivery. Any variance from the contracted terms must be agreed upon in advance by the buyer and seller. The grain must be delivered regardless of yield or quality concerns.

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Basis Strengthens
Futures Decrease Contracts

Futures Only

This contract prices, or “locks,” the futures price for the chosen delivery period. Using this contract leaves basis unpriced, exposing the customer to either upside opportunity or downside risk in basis price movements.

It is important to note that the set basis level is always tied to the time of physical delivery and location. Futures Only Contracts may be rolled to pick up market carries, but must be kept in the same crop year.

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Offer Contract

This contract allows the producer to work targeted price levels on all cash or forward sales.

These orders should be placed above the market in hopes that the market rallies enough to trigger the contracts. The producer needs to decide at what price to put in the offer. Expiration date for a cash offer is set by the producer. Expiration date for a futures only offer is valid for 30 days.

These contracts are free and can be cancelled at any time prior to the contract triggering.

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Alternatives Contracts

Deferred Payment Contract

Contracts can be deferred no more than one year, with an option to roll with pre-notification.

This is a credit sale contract.

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Accumulator

This contract accumulates bushels at a value above the initial futures level. If the futures price remains above the “Knock-Out” level, a set amount of bushels will be priced at the accumulation level, at the close of every week during the pricing period.

Using this contract leaves the basis unpriced, exposing the producer to either upside opportunity or downside risk of basis. Basis will be set after the end of the pricing period. Basis will be tied to the time of physical delivery.

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Direct Ship Program

By utilizing this program, a producer can obtain the End User’s price and discount schedule while also having those same bushels go toward their equity in Landus. Producers can also take advantage of marketing alternatives offered by Landus while still delivering to End User of choice. All bushels delivered through this program are eligible for Landus Patronage.

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Grain Marketing

Quadrant One Basis WeakensFutures Increase

Quadrant TwoBasis StrengthensFutures Increase

Quadrant ThreeBasis WeakensFutures Decrease

Quadrant FourBasis StrengthensFutures Decrease

Alternatives

Quadrant One Basis Weakens
Futures Increase

Quadrant TwoBasis Strengthens
Futures Increase

Quadrant ThreeBasis Weakens
Futures Decrease

Quadrant FourBasis Strengthens
Futures Decrease