MarketTracker grain contract

Cargill's MarketTracker grain contract is a futures pricing contract that allows benefit from futures price increases while providing downside protection.

Full Transcript

NARRATOR: Hi I’m MarketTracker.

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SUPERIMPOSED TEXT: Hello MarketTracker.

NARRATOR: Instead of starting with who I am and how I work, I’d like to know a bit more about you. When it comes to marketing your grain, what’s most important to you?

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SUPERIMPOSED TEXT: I like following the grain markets. I like to set a target price for my grain. I’m concerned about how a falling market can impact my profitability. It’s challenging deciding when and how to price my futures.

NARRATOR: The good news is that you’re not the only one. Even better news is that I can help. That’s because I provide a minimum price for your grain, the ability to capture better prices as the futures prices improve AND you don’t have to worry about properly timing your pricing decisions.

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SUPERIMPOSED TEXT: How so?

NARRATOR: I’m a target price contract or Grain Pricing Order, that comes with a trailing stop loss. “Stop Loss” in that your price cannot fall below a certain level, and if the market does go lower, your grain will be priced out. And “Trailing” in that your stop loss level follows the futures price up if it rises.

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SUPERIMPOSED TEXT: What do you mean?

NARRATOR: The trailing stop loss essentially “tracks” the market upwards. Now, if the futures market decreases, my trailing stop loss price does not follow suit – it remains at the same value. If that market level drops below your stop loss level, I’ll automatically trigger an order to sell your grain. Typically, this will be at your stop loss level. So, if you believe the market is going to go up, and if you’re happy with the price you would receive today – minus my fee and the range between today’s price and the stop loss level – this is the solution for you.

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SUPERIMPOSED TEXT: Won’t I still need to decide when to price out my futures?

NARRATOR: Only if you want to. My “Set it and Forget it” feature allows you to establish a target price for your grain. If the futures price increases above your target price, your sell order will automatically be executed – just like a target price or GPO.

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SUPERIMPOSED TEXT: How does this all fit together?

NARRATOR: I’ll walk you through the process. First, you decide how much grain you want to sell, and sign a fixed basis contract which determines your basis level, and when and where you want to deliver.

Next, you’ll customize the contract to best suit your needs. This includes setting things like your trailing stop loss level and your target price.

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SUPERIMPOSED TEXT: How closely do I need to watch the market?

NARRATOR: As much or as little as you’d like. You see, during the life of your contract, I’ll monitor the market for you and Cargill will alert you when either your trailing stop loss level or target price are triggered. If they are, your futures contract will be sold, finalizing your grain price.

Or, you can watch the market yourself and place an order on your MarketTracker contract once the futures price reaches a level you desire.

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SUPERIMPOSED TEXT: And what if nothing is triggered? What happens then?

NARRATOR: In the unlikely event that you reach the expiration date and the market prices have not yet triggered your MarketTracker, Cargill will help you decide whether to price your futures or roll the MarketTracker to the next futures period.

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SUPERIMPOSED TEXT: So what you’re saying is…?

NARRATOR: What I’m saying is I’m a great alternative if you believe futures prices are going to increase and you’d like to take advantage of it. I let you do so while protecting you from a falling futures price, and you don’t have to price your own futures unless you want to. Just think of me as a target price…with benefits.

I’m MarketTracker, part of Cargill’s grain contracting solutions.