Minimum price contracts are based on options markets. Structured in that way, these contracts give you the ability to benefit if futures market prices rise sharply. Best-fit alternatives for selected market conditions. Conclusions Grain contracts are important tools for managing price and income risk in the volatile price environment that exists today. Using them successfully requires a complete understanding of how various contracts work, the kinds of risk they are designed to control, and the areas of risk that remain after the contract is signed.
More complex types require one or more decisions after the contract is signed.
References Todd E. Kemp. National Grain and Feed Association. This publication provides information to help you understand risk management features of grain contracts. Contract provisions vary and some contracts may have provisions not discussed here. Seek professional assistance if there are details you do not understand.