BASIS CONTRACT
 
Purpose:
To lock in a premium or good basis level when flat price is not satisfactory.
 
When To Use:
When cash prices are low. (When premiums are good but the CBOT is low or unsatisfactory). To allow delivery of grain and also allow for price improvement. To get partial payment (an advance) on the grain yet have potential gain if the CBOT goes higher.

 
 
 
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