1. CropsProfit Help Centre
  2. CropsProfit Methodology

What are marketing tools?

  • These are the financial instruments (marketing tools) you can select to sell your crop.
  • Ask your registered trader if you are unsure which marketing tools to select.

Uncertain Harvest Marketing Tools

You can choose one of these marketing tools for the pre-harvest period of a season when you are not sure if you can deliver on a contract with a buyer.  

  • Buy at the Money Put Options. When you buy a put option, you earn a right (it is not an obligation) to exercise your option to sell your crop to the put option seller in a stipulated period of time. 
  • Custom-Made Instrument. Used when buyers create their own marketing tools, and where you do not have to guarantee delivery on the contract. 
  • No Action For Now. This setting switches the uncertain harvest marketing tools functionality off in CropsProfit.
  • Minimum Price Contract. You receive a guaranteed minimum price for your crop. You do not have to guarantee the delivery of your crop to the buyer. Sometimes also called delayed price contracts or managed portfolio contracts. (Update the original transaction price on CropsProfit when a buyer updates the contract’s price.)

Certain Harvest Marketing Tools

You can choose one of these marketing tools for the period of a season when you are sure you can deliver your crop on a contract with a buyer.

  • Do a Forward Cash Contract. The contract’s cash price, grade, and delivery quantity are for a future date. 
  • Do a Futures Hedge Contract. You take a short position on the market with a futures contract in the contract month used by your season’s crop marketing plan. (beware of the daily margin call.) 
  • Do Cash Sale. You deliver your crop to a buyer and receive money on the same day.
  • Do a Hedge to Arrive Contract. Lock in a futures price with a buyer, leaving the basis to be set later. The buyer will establish a hedge in futures on your behalf in exchange for your delivery of the cash crop at a set time. 
  • Do a Forward Fixed Price Contract. This contract type is an agreement with a fixed (final) price for a specific delivery date, grade and quantity.