Minimum Price
Contract
Protect Your BiAs.
The market could react to the March 31 USDA Report.
Are you prepared?
The corn and soybean acreage projections in the March 31 USDA report could cause
movement in the market.
This year’s projections are uncertain due to several factors:
1. Lower Commodity Prices
Falling commodity prices threaten projected margins and profitability.
2. Fertilizer Prices Hold Steady
Experts predict bean acres to increase due to lower production cost.
3. Spring Weather
Lack of fall field prep means the spring weather window will dictate swing acres between corn and beans.
How much could the March 31 report move the market?
It’s almost impossible to predict and this year presents more unknowns than most. But a look at market reactions
over the past eleven years shows that the March 31 report is a potential market mover that is worth preparing for:
May Futures (cents/bushel)
Market Volatility
2 Days Prior vs 2 Days Post Report
40
20
0
-20
CORN
BEANS
-40
-60
-80
-100
-120
-160
2004
2005
CargillProPricing.com
2006
2007
2008
2009
2010
2011
2012
2013
2014
Hedge your bias with Minimum Price
Benefits of Cargill Minimum Price:
Whether you expect the market to go up or down
following the March 31 report, a strategic move is
to hedge your bias. With options for almost any market
scenario, Minimum Price is the perfect tool to protect
your position from market shifts.
For a small investment, Minimum Price lets you
continue to build a selling strategy around your
market bias while ensuring you a floor price if the
market moves in an unfavorable direction due to
the March 31 USDA report.
Solidify position ahead of the March 31
USDA report
No upfront brokerage costs or margin calls
Select futures month of your choosing
Customize the date ranges of your option
Can be applied to sold or unsold bushels
Contracts offer a variety of put and call options;
allowing you to express your bullish or bearish bias
How It Works:
Minimum Price offers different combinations for different scenarios and can be added as a re-pricing
mechanism to almost any contract at any time. Your Cargill Representative can help you with the more
advanced combinations, but let’s walk through using basic put strategy to protect your bias.
Put Scenario
May corn is at $4.00. Your bias is that the market has room to go up. To hedge your bias, you purchase a
Minimum Price put on your unpriced grain contract with an expiration date of April 3 (three days after the
USDA Report) for an investment of $0.13.
If the market goes DOWN…
The USDA report shows higher than expected corn
acreage and corn prices drop to $3.50 at the expiration
date. You decide to price your grain contact.
$3.50 CME May futures at expiration
+$0.50 value of put option at expiration
-$0.13 contract fee
————————————————
If the market stays FLAT or goes UP…
The USDA report shows lower than expected
corn acreage and corn prices rise to $4.50 at
the expiration date. Minimum Price provides
no additional price enhancement, but you price
your bushels at this higher price. Your 13-cent
contract fee will be subtracted from your final
price at delivery.
$3.87 Future equivalent
© 2015, Cargill, Incorporated
Minimum Price works as a call contract on priced grain, too. Simply add a call to your sold bushel and any upward
movement in the market above your investment price will be added to your final price.
A Minimum Price contract for every objective
Single put and call contracts are just a taste of our Minimum Price offerings. Ask your Cargill Representative
about complementing your short-term and long-term marketing strategies with Spread, Collar and 3-way
Minimum Price contracts.
Disclaimer: Purchase Contract terms apply. This is provided to you for information purposes only, does not
constitute an offer, and is not intended to be a part of any contract that may be entered into. Please consult
the Purchase Contract for the terms and conditions that will govern the sale and purchase of grain.
CargillProPricing.com
Information provided is general in nature and is provided without guarantee as to results. The information
is not intended to be, and should not be construed as, trading, financial, legal, or tax advice. No warranty
is made with regard to the information or results obtained by its use. Cargill, Incorporated, its subsidiaries,
and affiliates disclaim any liability arising out of your use of, or reliance on, the information.