ADM Marketing Programs 09/18/17 11:21:25 AM|
|Dakota Midland Grain offers its customers ADM Advantage and Average Seasonal Price contracts in order to help diversify their marketing plans as they navigate volitile markets throughtout the year.|
Average Seasonal Price (ASP)
ASP contracts are used to price a portion of your production within a pricing window to capture historic seasonal price premiums prior to harvest.
How It Works
ASP contracts are offered for both corn and soybeans. There are multiple delivery periods to enroll in with corn as Sept. 2018, Dec. 2018, and Mar. 2018 futures are all offered. Delivery period for soybeans are exclusively for Nov. 2018 futures.
- You enroll a portion of your production before the pricing period begins.
- When the pricing period concludes, your ASP Futures Reference Price is established. You decide when to set the basis.
- You deliver your grain and receive a final price. The final price is the ASP Futures Reference Price +/- Basis-Service Fee.
ADM Advantage is a contract where the futures price is set by a group of marketing experts.
How It Works
This contract is a great marketing tool because it automatically executes for the farmer, allowing them to focus on other parts of their operations.
- The farmer chooses the crop they want to sell, the delivery period, and the marketing expert you’d like to have making the pricing decisions.
- The marketing expert then prices futures on your behalf and Dakota Midland Grain establishes the final futures reference price on your contract.
- Prior to grain delivery, you set the basis.
- The final cash price is the ADM Advantage Expert Futures Reference Price +/- Basis-Service Fee.
These are the three “experts” farmers have to choose from:
ADM Advantage contracts are offered for corn, soybeans, and wheat. Multiple futures months are offered for each commodity. The following table shows which futures months are available for each commodity:
- Richard Crow, Crow Trading, Inc.
- Crow has been pricing the ADM Advantage contract for more than 10 years and has 30 years of experience in farm price risk management.
- Kevin Van Trump, Farm Direction, LLC
- Van Trump is the president and founder of ag investment firm Farm Direction, LLC. He also has 20 years of experience as a trader on both the Kansas City and Chicago Boards of Trade.
- ADM Experts
- The final option is a team of ADM’s own traders who are based in hedge centers of Decatur, Chicago, Kansas City, and near South American production in Brazil. This group is in constant communication in order to adjust their positions according to changing market conditions.
|ADM Advantage Enrollment Months || || || |
|Corn ||March 2018 (CH8) ||July 2018 (CN8) ||September 2018 (CU8) ||December 2018 (CZ8) ||March 2019 (CH9) |
|Soybeans ||March 2018 (SH8) ||July 2018 (SN8) || ||November 2018 (SX8) ||January 2019 (SF9) |
|Wheat || || ||September 2018 (MWU8) ||December 2018 (MWZ8) || |
If you have interest in enrolling bushels into one of these contracts or have further questions on any of these contracts, feel free to call our offices and talk with one of our merchandisers.