Get Cash For your Crops and Maintain Futures Optionality

Farm Economics FBN Network Grain Marketing

When the grain markets are in a tough pricing environment, it’s important to give yourself every marketing advantage you can. In this blog post, we outline the advantages of a Deferred Futures Price Contract with Farmers Business Network.

Farmers Business Network recently introduced the Deferred Futures Price Contract. Deferred Futures Price Contracts benefit farmers that want cash flow up front and believe the markets are due for a rally. No storage? No problem.

Why use a DEFERRED FUTURES Price Contract?

  • Participate in futures price movement: You can defer pricing the futures upon delivery of your grain
  • Get cash up front: We pay you 70% of your Initial Cash Price* up front, providing you with cash flow at a crucial time of year
  • Avoid costly storage fees: Reduce your need to pay for grain storage

How Do DEFERRED FUTURES Price Contracts Work? 

  1. You deliver your grain to the elevator of your choice, under FBN's name
  2. FBN pays you 70% of your Initial Cash Price up front
  3. You defer fixing the futures price until you decide to lock it in
  4. When the futures is set, FBN pays you the remaining 30% of the Initial Cash Price +/- the difference in the Deferred Futures Price

By the Numbers: Example of How it Works

Example Scenario 1: October cash prices are at $4/bu (after discounts) and March Deferred Futures Price is at $4.50. You believe March futures prices will rally, but you want cash flow now. You set a Deferred Futures contract with FBN at $4.50. You then deliver your grain to the elevator of your choice under FBN’s account at a $4 cash price.

In March, the Deferred Futures Price improves by $0.30 to $4.80. The table below shows your payments.

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Example Scenario 2: You face the same details as in scenario 1, but the March Deferred Futures Price has declined by $0.30 when you close the contract. Market Conditions could result in no further payment to you at contract close.

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Watch An Explainer Video:


 Interested in a Deferred Futures Price Contract?

Call 844-200-FARM or Let Us Know Below!

The risk of trading futures and options can be substantial and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. FBN BR LLC does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. Past performance is not necessarily indicative of future results. For the purposes of quality assurance and compliance, text messages and phone calls to and from FBN BR LLC may be recorded and archived.

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