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  • Automatic Advantage: Price Accumulator

The Price Accumulator Advantage

Rather than settle for the current market price, the Price Accumulator grain marketing contract can help you achieve strategic price targets to establish your futures reference price. If prices go higher, you may sell additional quantities and if prices go much lower, pricing activity may stop all together or trigger a minimum guarantee futures reference price.

ADM products and services vary by location.
Contract Options
  • Non-Guaranteed Price Accumulator
    Price Accumulator Contracts offer the choice of a guarantee and a non guarantee. With the Non-Guaranteed Price Accumulator Contract, Accumulation Hedge Levels and Knock-Out Levels are defined. If the underlying futures market settles above the Knock-Out Level but below the Accumulation Hedge Level, you sell one times the daily pricing quantity on that day at the Accumulation Hedge Level. If the market settles at or above the Accumulation Hedge Level, you sell two times the daily pricing quantity at the Accumulation Hedge Level. If the market settles at or below the Knock-Out Level, pricing stops.
  • Guaranteed Price Level
    If you wish, you can add a Guaranteed Price Level to the Price Accumulator Contract. In this option, if the futures market ever settles at or below the Knock-Out Level, the remaining daily pricing quantities will be priced at the Guaranteed Price Level.
    How it Works
    • Here’s how it works.
      1. You choose the number of bushels you want to price, the time period in which pricing for a specific commodity will occur and a delivery period.
      2. You decide if you would like to add a Guaranteed Price Level to the Price Accumulator Contract.
      3. When the pricing period concludes, the final futures reference price will be established on your contract by summing the daily pricings and quantities according to the formula in place.
      4. Prior to grain delivery, you set the basis.
      5. You deliver your contracted grain and receive the final cash price, which is the Final Futures Reference Price +/− Basis − Service Fee + Premium Paid (if any).
    The Benefits
    • The benefits of the Price Accumulator contract.
      • Helps achieve target price levels that may not otherwise be achievable.
      • Forward marketing can help you mitigate risk, making it a critical component to your overall marketing portfolio.
      • The Guaranteed Price Accumulator option assures a minimum futures reference price for your grain.
      • It automatically executes for you, minimizing stress and worry.
    Performance
    • Performance
      Price Accumulator Contracts perform according to the formula put in place, pricing an equal portion of grain each day during the pricing period while recognizing price guarantees, if any. Additional quantities will be priced if underlying futures settlements exceed established Accumulation Hedge Levels.

      For more detailed historic data contact your local ADM Merchandiser.

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    Ready to get started on your grain marketing plan?

    We’re ready to help. Get in touch with your local ADM Merchandiser today.

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