Averager Contract
Historically Grain Prices between April 15 and July 31 are higher than grain prices just before harvest. Averager Contracts from DGC can help Market equal bushel amounts each week throughout this period.
Risk-Low
Reward-Moderate, as the producer can gain upside average, but not total rise.
Use when:
- Needing to sell old or new crop corn or soybeans
- Futures prices are stagnant.
Advantages:
- Elevator Sells grain at a time they may not be thinking of selling grain
- Takes the emotion out of marketing your grain
- Small charge
- Producer has the ability to price out of contract and sell remaining bushels
- Set basis at any time (if using the HTA option)
Disadvantages:
- Subject to market fluctuations
- Producer may not get the highest price compared to other sales he/she made
Typically April to July Timeframe – Structure an average for Old Crop, New Crop, and HTA for New Crop