Because of the problems, many elevators have instituted tighter controls over their hedge to arrive contracts. Rolls are limited to the same crop year as the original hedge, and you may have to pay the elevator the equivalent of margin money if futures prices rise. Sell Futures Fixing futures and basis at the same time has one drawback. The futures and cash markets are not always strong at the same time because basis changes. It reflects the cost of storing a commodity until the delivery period and transporting it to the delivery site set by the futures contract.
Demand also figures in.
The more customers need the crop, the more they're willing to pay for it, strengthening the cash market and the basis. As a result, fixing the futures and basis parts of your price at different times may help you realize a higher overall price. One way to do this is to sell exchange traded futures contracts directly through a broker. This is what your elevator does to hedge its risk after it forward contracts grain with you. Futures contracts list a delivery month and a quantity.