High Moisture Program
Silage/High Moisture Program Wheatfield Grain Holding LLC’s silage/ high moisture corn program allows producer and dairymen the independent flexibility to price their grain without the liability of maintaining margin calls.
Allows producer to sell and price grain to Wheatfield Grain Holding LLC whenever price is most favorable for him. Allows dairymen to buy and price grain from Wheatfield Grain Holding LLC whenever price is most favorable for him. One party’s transaction in no way requires the other party to act. Neither party has to make margin calls. Wheatfield Grain Holding LLC covers all margin calls.
Pricing of Grain
All grain MUST BE priced before November 15 (unless otherwise agreed upon) of the current marketing year. If not priced by then, Wheatfield Grain will price if for you. This includes both contract and contract overage bushels. Grain can be priced as many times as necessary, but must be done in 1,000 bushel lots and subject to contract quantity restrictions (I.e. - Parties can’t price more grain than what the contracts specify). Grain can be priced at any time via a phone call to Wheatfield Grain Holding Company LLC. We can price during the day session, after the close, or during the overnight trade. All grain will be priced against the corresponding December CBOT futures, unless otherwise specified in the contract.
Involved Parties’ Obligations
Both producer and dairymen must agree on a bushel amount that they are willing to buy and sell. Both producer and dairymen must agree on a basis value that will be applied against the corresponding December CBOT futures. Both producer and dairymen must agree on a discount schedule/ formula that converts at the scale delivered silage tons back to a 15% moisture corn value. If contracting high moisture corn as well, the same applies. Both producer and dairymen must agree on a scale by which weights will be measured.
Program Process If both parties agree to enter into the Wheatfield Grain Holding LLC silage program, the next steps are:
Involved parties must supply Wheatfield Grain Holding with the necessary information as bulleted in ‘Involved Parties’ Obligations’ section. Wheatfield Grain Holding will then write a basis buy contract to the producer and a basis sell contract to the dairymen. Once contracts are signed, parties can begin pricing their grain. Each time grain is priced Wheatfield Grain Holding will send a cash sale or cash purchase contract to the respective party. In order to make sure contracts are fulfilled, Wheatfield Grain will need a spreadsheet detailing the delivered loads of silage to the dairy. This spreadsheet can be sent via email at the end of silage and/or high moisture season. This will be provided by the dairyman.
Payment Terms and Fee Structure
Once both contracts are satisfied, Wheatfield Grain Holding will pay the producer his delivered grain and invoice the dairymen for the delivered grain. Payment for grain will only be received after it is delivered. Grain will only be invoiced after it is delivered. Invoice is due upon receipt. Wheatfield Grain will provide this service for a 12 cent per bushel fee, which will be split equally between both parties. The 12 cent/bushel charge will be taken out of the basis value for each party. (I.e. – If both parties agree to a $-.35 basis under December futures then the producer’s selling basis will be $-.41 CZ and the dairymen’s purchasing basis will be $-.29 CZ)
Failure to Perform In the event that either party fails to perform their end of the contract, the following events will take place in accordance with NGFA trade rules. For full details of failure to perform procedure refer to NGFA Grain Trade Rules.
If either party finds that he will not be able to complete the contract within the contract specifications, it shall be his duty at once to give notice of such fact to Wheatfield Grain Holding by email. Once notice is given, Wheatfield Grain shall then, at once elect to either o Buy in for the account of the seller, using due diligence, the defaulted portion of the contract, or o Cancel the defaulted portion of the contract at fair market value. In either instance, Wheatfield Grain Holding will seek monetary charges for failure to perform. This monetary charge will be based on buy-in value or fair market value. (I.e.If the farmer has a 100,000 bushel contract for silage at $6 cash and only delivers 99,000 bushels and today’s price is worth $7 bushel cash, Wheatfield Grain Holding will either try to buy in the remaining bushels or cancel the contract at fair market value ($7). The damage due the farmer would be the difference between the contracted price verses the fair market or buy-in price times the remaining bushels.
Disclaimer: *Wheatfield Grain Holding is state licensed and bonded grain warehouse as well as an active member of the National Grain and Feed Association (NGFA) and all trade rules are governed as such.*
Allows producer to sell and price grain to Wheatfield Grain Holding LLC whenever price is most favorable for him. Allows dairymen to buy and price grain from Wheatfield Grain Holding LLC whenever price is most favorable for him. One party’s transaction in no way requires the other party to act. Neither party has to make margin calls. Wheatfield Grain Holding LLC covers all margin calls.
Pricing of Grain
All grain MUST BE priced before November 15 (unless otherwise agreed upon) of the current marketing year. If not priced by then, Wheatfield Grain will price if for you. This includes both contract and contract overage bushels. Grain can be priced as many times as necessary, but must be done in 1,000 bushel lots and subject to contract quantity restrictions (I.e. - Parties can’t price more grain than what the contracts specify). Grain can be priced at any time via a phone call to Wheatfield Grain Holding Company LLC. We can price during the day session, after the close, or during the overnight trade. All grain will be priced against the corresponding December CBOT futures, unless otherwise specified in the contract.
Involved Parties’ Obligations
Both producer and dairymen must agree on a bushel amount that they are willing to buy and sell. Both producer and dairymen must agree on a basis value that will be applied against the corresponding December CBOT futures. Both producer and dairymen must agree on a discount schedule/ formula that converts at the scale delivered silage tons back to a 15% moisture corn value. If contracting high moisture corn as well, the same applies. Both producer and dairymen must agree on a scale by which weights will be measured.
Program Process If both parties agree to enter into the Wheatfield Grain Holding LLC silage program, the next steps are:
Involved parties must supply Wheatfield Grain Holding with the necessary information as bulleted in ‘Involved Parties’ Obligations’ section. Wheatfield Grain Holding will then write a basis buy contract to the producer and a basis sell contract to the dairymen. Once contracts are signed, parties can begin pricing their grain. Each time grain is priced Wheatfield Grain Holding will send a cash sale or cash purchase contract to the respective party. In order to make sure contracts are fulfilled, Wheatfield Grain will need a spreadsheet detailing the delivered loads of silage to the dairy. This spreadsheet can be sent via email at the end of silage and/or high moisture season. This will be provided by the dairyman.
Payment Terms and Fee Structure
Once both contracts are satisfied, Wheatfield Grain Holding will pay the producer his delivered grain and invoice the dairymen for the delivered grain. Payment for grain will only be received after it is delivered. Grain will only be invoiced after it is delivered. Invoice is due upon receipt. Wheatfield Grain will provide this service for a 12 cent per bushel fee, which will be split equally between both parties. The 12 cent/bushel charge will be taken out of the basis value for each party. (I.e. – If both parties agree to a $-.35 basis under December futures then the producer’s selling basis will be $-.41 CZ and the dairymen’s purchasing basis will be $-.29 CZ)
Failure to Perform In the event that either party fails to perform their end of the contract, the following events will take place in accordance with NGFA trade rules. For full details of failure to perform procedure refer to NGFA Grain Trade Rules.
If either party finds that he will not be able to complete the contract within the contract specifications, it shall be his duty at once to give notice of such fact to Wheatfield Grain Holding by email. Once notice is given, Wheatfield Grain shall then, at once elect to either o Buy in for the account of the seller, using due diligence, the defaulted portion of the contract, or o Cancel the defaulted portion of the contract at fair market value. In either instance, Wheatfield Grain Holding will seek monetary charges for failure to perform. This monetary charge will be based on buy-in value or fair market value. (I.e.If the farmer has a 100,000 bushel contract for silage at $6 cash and only delivers 99,000 bushels and today’s price is worth $7 bushel cash, Wheatfield Grain Holding will either try to buy in the remaining bushels or cancel the contract at fair market value ($7). The damage due the farmer would be the difference between the contracted price verses the fair market or buy-in price times the remaining bushels.
Disclaimer: *Wheatfield Grain Holding is state licensed and bonded grain warehouse as well as an active member of the National Grain and Feed Association (NGFA) and all trade rules are governed as such.*
