News > GCC News > Basis and Hedge-To-Arrive Contracts: What's The Difference?

Basis and Hedge-To-Arrive Contracts: What's The Difference?

Sep 02, 2021

By Lindy McMillen


Your Garden City Co-op offers a variety of contracts to suit your grain marketing needs. Two of these include basis contracts and hedge-to-arrive (HTA) contracts. These contracts break down the cash price of grain into its individual components: the futures price and the basis.

Basis contracts are a forward contract that allows a producer to lock in the basis on a future grain delivery but leaves the futures level open to be priced later. Basis contracts can make sense when the basis is favorable, but the farmer believes that futures may go higher.

On the flip side, an HTA contract is a forward contract that allows a producer to lock in a futures price on a future grain delivery but leaves the basis open to be set later. An HTA is an option that makes sense when futures are high, but the producer believes that basis will improve.

Reach out to your grain team member to learn more about these contracts and to discuss what would be a good fit for your operation.
 


Read More News

Sep 23, 2022
(UPDATED Sept 23rd) The membership of Hooker Equity Exchange voted on September 22nd regarding merging with the Garden City Co-op, Inc. and the vote passed 52 to 4 to proceed with a merger.
Sep 09, 2022
Estate stock redemptions are taken to the board for review semi-annually in April and October.  Be sure to have your applications into the main office by the deadline.
Sep 02, 2022
A moisture probe can help you make more informed and real time irrigation and fertility decisions by giving live data on how deep your moisture and nutrients are and at what depth your plant...