Advanced Grain Pricing Program
In the Advanced Grain Pricing Program (AGP), we take three fundamental approaches to price risk management.
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Separate futures and basis decisions. Net farm price is derived in two separate markets, represented by futures and basis. The optimal approach is to ALWAYS consider them separately. This means at times, selling futures while waiting for a better basis. Or locking in basis and doing the flat price later (or incrementally over time).
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Earn carrying charges. Used appropriately, calendar spreads and “basis appreciation” rewards holders of inventory.
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Price incrementally over time. Avoid the pitfalls of volatility and variability by pricing in small amounts on a regular – or near regular – basis.
We place hedges for you - you sell your canola. The net result is a combination of our hedge activity and your cash (basis) decisions.
Together, we build a better price over time.