The delivery instrument for Grain and Oilseed futures is either a shipping certificate or a warehouse receipt. Although most futures positions are not held to delivery, it is the possibility of delivery that causes the cash and futures prices to converge.Īs a futures contract nears its delivery month, those who are still holding open futures positions are notified by their Futures Commission Merchant (FCM) or broker that they must either close out their positions or be prepared to go through the delivery process, which is facilitated by CME Clearing.Ī short position holder must be prepared to deliver the underlying commodity. In many cases, the cash and futures prices may be nearly the same. Most futures positions are offset or rolled forward, and only a small percentage of them are held for delivery.Īs the delivery month of a futures contract approaches, the cash price and futures price converge.
To avoid delivery, you need to offset or roll forward your futures positions before a contract goes into its delivery cycle. Grains or oilseeds futures contracts represent a commitment to make or take delivery of the commodity at some point in the future. Even though most participants in the futures market will never be involved in actual delivery, it is important for all traders to understand the delivery process, due to the impact on futures contract pricing.
The following is a high-level description of the delivery process from the Chicago Board of Trade. Louis and Alton Switching Districts will be that portion of the upper Mississippi River below river mile 218 at Grafton, IL and above river mile 170 at Jefferson Barracks Bridge in south St. Louis and Alton Switching Districts – When used in these Rules, St.
Chicago and Burns Harbor, Indiana Switching District.Soybean shipping certificates shall specify shipment from one of the warehouses or shipping stations currently regular for delivery and located in one of the following territories: Anybody taking delivery during the maintenance time period should pay attention to the forward barge spot rates, as this could impact the future months’ price spreads. The Chicago Board of Trade (CBOT) ruled that the impact to barge freight should be known because this maintenance is planned and well-advertised. From July 1 through October 30, major maintenance will be taking place on the Illinois River, a key part of the system. On March 1, published a detailed article on the topic of this network of U.S. The Mississippi River Inland System plays a significant role in the U.S.
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