The Combine Forum banner
1 - 20 of 26 Posts

·
Registered
Joined
·
216 Posts
Discussion Starter · #1 ·
Does any one know what legal right I have when I want to get out of a futures delivery contract.
The contract is with Vittera, BUT it seems the payment is through CWA.
The cash price is a dollar / bu higher. So it is costing me a dollar a bu. But should I have to pay the bases, when the elevator does not have to handle my grain, do they need to profit, when they have not done any work????
It is flax, I do not know what the bases was on it, I sold during the train problem so I guessing the bases was higher than needed.
When I got the bill it was 4 different bills, 3 for the same amount and the 4th a smaller amount adding up to a dollar a bushel.

Thanks for your advice

Ed
 

·
Registered
Joined
·
1,802 Posts
If I was told right, you can buy your way out but you will pay the difference from your contract price to the present spot price.
Probably better taking the loss and delivering against your contract.
 

·
Registered
Joined
·
93 Posts
I think the only way "out of it" is to write the elevator a cheque in the difference of the contracted price to today's price which is a $1.00 difference as you said. So basically there is no way out of it, just take the loss.
 

·
Registered
Joined
·
1,198 Posts
Selling grain plays mind games with me too. Everyone is the same. The only thing I can say is put your thoughts into your next sale not that one. Also bear in mind that at the point we sign the paper we are happy. What happens after that is actually a moot point. Also consider if you ever will need to haul the this terminal again in your life time.
 

·
Registered
Joined
·
1,618 Posts
I feel your pain big time! Locked in 20000 of #1 durum at $6.50, 16000 @ 7.25, 10000 @ 7.75, 10000 @ 8.75. Last 3 were #2 contracts.. I'm upside down about a quarter million on my awesome marketing skills.. I was going into 2014 thinking durum had nowhere to go but down.
 

·
Registered
Joined
·
4,919 Posts
Would you let the elevator out of the contract if the dollar was in your favor? Deliver and the hit or buy out the contract if they will let you. You should not be able to get out of it free and clear. It blows, I know. I delivered $5 corn when cash price was $8, luckily not a lot.
 

·
Registered
Joined
·
1,802 Posts
What happens when you sigh a contract with one company and they offer you a grade lower than every other grain company I took same samples to call it a 2 contract company calls it a 3
I that situation you should be able to send a sample to the grain commission for grading.
 

·
Premium Member
Joined
·
5,951 Posts
Viterra got the gears from me.

Futures only oat contract signed last year for Sept. delivery.... Told me they won't take it till Jan, won't let me out of the contract. And will not give me a basis other than their even buck bullshit in the system which is $2.25 a bu netting me $0.90.


They "are not interested in buying out the contract".

So basically, 4 months over the delivery time, and no basis for it....

They want the difference (which is actually in my favor) + the basis to buy out if they "were interested".


They'll be getting a letter from my lawyer pretty quick.
 

·
Registered
Joined
·
216 Posts
Discussion Starter · #12 · (Edited)
I am ok with paying the $1.00 a bushel to get out, because that is what I agreed to.

I did sell my canola for $2.00 higher than cash price. So over all, I am ahead. I will continue to price some of my grain ahead of harvest.

My question is what is the legal end of things, the elevator is taking money on elevation/handling cost witch they do not incur, and maybe freight cost that were likely estimated high. I was hoping there was a law fair trade, to protect farmers. throw the Canadian Grains Commission , or some other government laws or rules.
 

·
Premium Member
Joined
·
543 Posts
I am ok with paying the $1.00 a bushel to get out, because that is what I agreed to.

I did sell my canola for $2.00 higher than cash price. So over all, I am ahead. I will continue to price some of my grain ahead of harvest.

My question is what is the legal end of things, the elevator is taking money on elevation/handling cost witch they do not incur, and maybe freight cost that were likely estimated high. I was hoping there was a law fair trade, to protect farmers. throw the Canadian Grains Commission , or some other government laws or rules.
If they took your contract to deliver during a set time period and have sold it to export it they actually don't own your grain anymore (in theory). In such a case they would have to source new grain to fulfill their obligation to export as a result of your desire to break your contract. In such a case your $1/bu you are paying for them 'doing nothing' is actually them covering their tails by drawing out new sales in the cash market to cover their export exposure. Same applies to their feedlot, crusher, milling, etc sales.
 

·
Registered
Joined
·
4,799 Posts
Does any one know what legal right I have when I want to get out of a futures delivery contract.
The contract is with Vittera, BUT it seems the payment is through CWA.
The cash price is a dollar / bu higher. So it is costing me a dollar a bu. But should I have to pay the bases, when the elevator does not have to handle my grain, do they need to profit, when they have not done any work????
It is flax, I do not know what the bases was on it, I sold during the train problem so I guessing the bases was higher than needed.
When I got the bill it was 4 different bills, 3 for the same amount and the 4th a smaller amount adding up to a dollar a bushel.

Thanks for your advice

Ed
Did you lock in the basis too or just the futures? If you locked in the basis too you should have to pay the difference in the futures and the difference in the basis. Remember they have likely already found a buyer for your grain so you have to cover the cost to replace your grain.
 

·
Registered
Joined
·
395 Posts
I am ok with paying the $1.00 a bushel to get out, because that is what I agreed to.

I did sell my canola for $2.00 higher than cash price. So over all, I am ahead. I will continue to price some of my grain ahead of harvest.

My question is what is the legal end of things, the elevator is taking money on elevation/handling cost witch they do not incur, and maybe freight cost that were likely estimated high. I was hoping there was a law fair trade, to protect farmers. throw the Canadian Grains Commission , or some other government laws or rules.
If Ritz would have reappointed Assistant Commissioners, they could have helped you with all these legal questions. Maybe it is time for a farmers advocate office to work in the interest of producers.
 

·
Registered
Joined
·
1,222 Posts
Viterra got the gears from me.

Futures only oat contract signed last year for Sept. delivery.... Told me they won't take it till Jan, won't let me out of the contract. And will not give me a basis other than their even buck bullshit in the system which is $2.25 a bu netting me $0.90.


They "are not interested in buying out the contract".

So basically, 4 months over the delivery time, and no basis for it....

They want the difference (which is actually in my favor) + the basis to buy out if they "were interested".


They'll be getting a letter from my lawyer pretty quick.
As stupid as it might be I would settle down and take a deep breath. All these grain company's have records of everything we do. So calculate the cost of being blacklisted before you act. Send a legal letter right or wrong to one of them and see what it costs you over the next 20 yrs.
 

·
Registered
Joined
·
869 Posts
If Ritz would have reappointed Assistant Commissioners, they could have helped you with all these legal questions. Maybe it is time for a farmers advocate office to work in the interest of producers.
Yes I think we lost a lot of stability in the last few years. There are 10 month old contracts not delivered in our area. We just finished delivering some 7 moth old contracts of Cps. The grain co had no intention of buying out the contracts which were higher than the cash price. They filled some bins and are still waiting to sell a boat load to clear up 2013s grain!!

There are some new situations that need some one to either mediate or create some new laws with penalties. Right now we're on our own. Use to have that marketing board that everyone had to respect but now that it's gone Thers a big need for somthing in this department.
 

·
Registered
Joined
·
395 Posts
What happens when you sigh a contract with one company and they offer you a grade lower than every other grain company I took same samples to call it a 2 contract company calls it a 3
What is the actual grade? Was the other elevators just trying to get your grain or is it a #2? If it is a #2 send to CGC for "subject to inspectors grade and dockage" for binding arbitration.

Moral: Know your product and how to assess it.
 

·
Registered
Joined
·
368 Posts
What is the actual grade? Was the other elevators just trying to get your grain or is it a #2? If it is a #2 send to CGC for "subject to inspectors grade and dockage" for binding arbitration.

Moral: Know your product and how to assess it.
Agree with this. Now that there are no pools that you need to get into to get final payments, etc, the actual grade is irrelevant. They may have told you they will buy it as a 2, but discounts would be the same price as the 3. The final price is what needs to be understood, rather than the old days of grades. I will buy all of your grain as a number one bag of marbles, but the price is still what everyone else is paying as their 2's. Too many farmers are stuck with the old "ego" mentality of high grades over high prices.
 
1 - 20 of 26 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top