Grain Programs

Target Averaging

The Target Averaging contract only prices futures on days that the market is at or above a Target Price that you designate. When the average futures price is finalized, bushels may be delivered to the destination of your choice.

How it works:

1.) Commit to a bushel amount. Tell us how many bushels you would like to enroll in the Target Averaging program. You can enroll in old crop and/or new crop pricing periods, just be sure to sign up prior to the enrollment deadline.  

2.) Designate a target price. The Target Price does not lock in a price, but it represents the minimum futures price at which you are willing to make sales. For example, you might select a Target Price that 

represents your break-even price to ensure that you are only averaging on days when prices are above your cost of production.

3.) Let the averaging begin! Each day the futures market settles above your Target Price, a few bushels are sold at that day’s settlement price.  Each day the futures market settles below your Target Price, no bushels are sold, but they are put on hold and accumulated until the market returns to the Target Price. If the market never reaches the Target Price, then the bushels remain unsold.  

Please note:  Depending on the Target Price you select and market action, there is no guarantee that your bushels will get priced. 

 

Managed Futures

These programs draw off the experience of third-party trading professionals to set the futures price on a portion of your corn and soybeans.  

Enroll bushels with one advisor or diversify by spreading your bushels over multiple advisors.


Download a pdf of the Managed Futures brochure here. 
 

Program Highlights:

• Enrolled bushels are marketed by professional traders with years of experience.

• All hedges and trades are fully transparent.  At any given time, you will know how many bushels are sold and at what price. You can compare your personal marketing decisions with those of the advisor(s).

• 100% of the enrolled bushels will be priced by the specified ending date.• Management fees of 8 cents/bu on corn and 10 cents/bu on soybeans are deducted from the final price.

• When the final futures price is established, the grain can be delivered to the grain facility of your choice.  Grain does NOT have to be delivered to a River Valley Cooperative owned facility.

• Producers should have realistic expectations. These programs will never hit the market highs, but they generally take advantage of market carries and seasonal tendencies. Overall, they should be viewed as diversification tool.

Target Averaging Pricing Example

Download a pdf of the Target Averaging flyer here.