A purchase contract is issued when grain is purchased for a future delivery. Grain purchase contracts contain the following information:

1. Date of sale
2. Name of seller or sellers
3. Bushel Quantity
4. Grade
5. Price
6. Delivery destination
7. Delivery period or time frame
8. Grain origin (from farm, storage, price later, or warehouse receipt)

When pricing stored or price later grain, it is the seller's responsibility to specify the exact number of bushels being sold or priced.

All grain purchase contracts are issued in duplicate and the seller and buyer must sign all contracts. Both the original and carbon copy will be mailed to the seller. It is the seller's responsibility to sign and return the original to the buyer. It is also the seller's responsibility to notify the elevator if a confirmation of the sale in not received within 1 week from the sale date.

Every effort is made to monitor grain purchase contracts but it is the seller's responsibility to notify the elevator within 1 week of any discrepancy pertaining to the contract. Discrepancies will be adjusted as of the contract date and any grain or loss will be for the buyer's account.

Shortage and Cancellation of Purchase Contracts

SCG is a cash buyer of grain, not a brokerage firm. Therefore, producers are cautioned not to sell grain that they do not intend to deliver. Situations may arise that result in a shortage or a necessity to cancel a purchase contract. If this occurs, it will be handled in the following manner:

1. In case of a shortage, if the market is higher than the contract price, the producer will be charged the market difference plus 5 cents per bushel for each bushel of shortage. If the market is lower than the contract price, the elevator will pay the difference to the customer less 5 cents per bushel for each bushel of shortage.
2. In order to cancel a purchase contract, the Chicago Board of Trade must be in open session.
3. In figuring the difference between the contract price and the price to be used for determining the gain or loss, the cash bid on the day of cancellation will be calculated at the same basis level as the cash bid on the original sale date.
4. It is the producer's responsibility to check on bushels delivered against purchase contracts in order to determine if there is a shortage. Deliveries will be monitored and the contract shortage will be figured as soon as the information is available to the buyer.

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