Now the largest sector of Agricole's service and the most important service to its clients. This is how clients make, and limit losing, revenue/ margin from trading in the very volatile combinable crops market. Clients are trying to make sense of the commodity markets, when every year is different.

Please see the graph below of the last few years' wheat price fluctuations. Who can second guess these?

An individual service, based on the clients own minimum required £/t, to make a living, 'The Standard of Living Line', SOLL. This is higher than a break even price. Using this SOLL, a budget is created from the client's own need for cashflow and storage space. Crops are sold above the SOLL, with some sort of Price Risk Management hedge added.

Crops are sold up to two harvests ahead. When there is a Futures price there is an ex-farm price.

Your crop is hedged, using forward physical contracts or minimum price contracts to manage the effect of the volatile price movements on their income. This takes the emotion out of trading and separates the market from your business needs. Agricole's aim is to ensure that whatever decision is made, on whichever day it is made, that the top 1/3rd of all prices from the 30 month marketing season are realised.

The maximum loss possible is the premium to buy the minimum price contract, the price of which varies from season to season and the time covered.

Please see the graph below which illustrates how minimum price contracts reduce the effect of volatility of the market.

Storage and Minimum Price Contracts

Why do you store grain for long periods? Many times it is not worthwhile. Contact me for an explanation of how minimum price contracts can help you save money and reduce hassle. You don't need grain in a shed to take advantage of a price rise.

Contact us for more information.