Let’s talk bid sheets. First off, what are bid sheets in real English, please?
A bid sheet is a just a fancy name for a list of prices that a grain buyer {elevator, corn or soy processing plant, livestock feeder, etc.} is willing to pay for your grain.
Depending on when you can deliver the grain will determine what price you can contract for. When the Farm Guy Next Door is referring to a grain buyer’s bid sheet, he doesn’t typically include the words, ‘bid sheet.’ Instead, he’ll say things like, “What is Pillen paying for corn today compared to Cargill?” Or, “What is ADM bidding for beans for January?” Questions like these are answered using the location’s bid sheet. Most location bid sheets can be found online, and many will send out text updates daily with bids for the day.
The bid sheet lists each commodity the location is buying. For example, an ethanol plant will have a bid for corn, but not soybeans. If you’re ever curious what commodities an elevator or processor is buying, just check out their posted bids.
For each commodity, different prices are posted depending on when the commodity is delivered. The delivery period and the corresponding futures, basis and cash price listed comprise one unit. There’s no mixing and matching that occurs on a bid sheet.
On bid sheets, what can I expect to see?
1. Commodities: The bid sheet list the commodities that location is posting a bid for. Some bid sheets will list all bids on one page for the location with a separate section for each commodity, and others will list the commodities on separate pages.
2. Delivery date range: This is the time frame you must deliver the grain in order to receive the corresponding price. If one pricing line on the bid sheet reads December 1- December 31 with a corresponding cash price of $3.50 and the second line shows a $3.90 cash price posted for January 1-January 30th delivery, you can’t sell for $3.90 and deliver in December. Rather, you can only receive $3.90 for your grain if you can haul it to the buyer in the month of January.
3. Futures Price & Month: This is the price that is posted on the CME. The grain buyer that’s posting the bids has no control over this price. Rather, it is what the market itself has determined the commodity is worth for that futures month. For the same delivery period, cash prices may vary at different locations, but not the futures price. Note: The delivery month & the futures month listed on a bid may not be the same calendar month. (Spoiler alert: I’ll explain this in a future post!)
4. Change: This is an indicator of how the futures price has moved. When the market is trading, the change listed will fluctuate. However, when the market is closed, the ‘Change’ will display the value of the change from the opening price to the closing price from the previous trading period. (For corn, beans & wheat, the weekday trading hours are from 8:30am to 1:20pm CT)
5. Basis: The portion of the price that the grain buyer has full control over. There are many factors included in the determination of basis, which I will outline for you in a future post.
6. Cash: The price the buyer is willing to pay for your grain for the specified delivery date. This is calculated using the two aspects of price described above. Cash price = Futures + Basis
This is just the first of a series of posts related to bid sheets. I’ll continue to expand on the 5 elements above over the next couple of weeks to give you a better understanding of each element.
For now, take a few minutes to find bids for the grain buyers you deliver to increase your comfort level with bid sheet formats. The best and most accurate place to go for bids is the location’s own webpage. Retrieving bids from a third party site that complies bids from multiple locations, like DTN, is not usually the best option due to the potential for a delay in updates to the bids.
Here are examples:
ADM: https://www.admfarmview.com/home
Cargill: https://www.cargillag.com/LocalBids/FindALocation
Aurora Co-op: http://auroracoop.com/markets/
CVA Co-op: https://www.cvacoop.com/Grain/Cash-Bids-en
Download my ‘Bid Sheet Breakdown” for a handy reference to keep on your desk indicating each important aspect of a bid sheet. No matter what format the bid sheet is in, this go-to sheet will help you spot the important information quickly.
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