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GreenField Ethanol’s Ontario Buy Direct Program

Background

In addition to the familiar Fixed Forward Prices and Basis Contracts, that have served the producer well in the past, GreenField Ethanol now offers the following contracts:

Minimum Price

Provides the producer with the protection of a guaranteed minimum, or floor price, yet enables participation in a strong futures market rally at a later date. The Minimum Price Contract is very safe and all the costs are defined. The premium paid (deducted from cheques) may be inexpensive compared to interest, storage, drying and shrink and hauling costs. This is a flexible contract and can be incorporated into a variety of strategies.

Futures First (No basis established)

Allows the producer to lock in a specific futures price level while waiting for a change in the basis. The Futures First Contract can be written for any quantity of grain and the basis can be set any time prior to delivery and the pricing deadline. This contract removes the need for the producer to have his own futures brokerage account and no margin calls are involved.

Offer Contract

Can be used in conjunction with other contracts to allow the producer to organize and implement a marketing strategy or plan, while absent form the market arena. The Offer Contract instructs GreenField Ethanol to trigger a pricing, either futures or basis, at a level pre-determined by the producer. The Offer Contract takes the emotion out of grain marketing and maintains discipline.

Average Price Contract

The Average Price Contract locks in an average price established over a set time period (several months). Traditionally implemented when futures are at their seasonal highs. The producer agrees to price, based on the Chicago Board of Trade (CBOT) futures, a specified number of bushels on the same day each week for a specific number of weeks. The basis is usually established at the outset. The Average Price Contract removes all emotion from the marketing decision.