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SC Iowa | Offers......I am not sure there are any specific grain trade rules regarding the placement of offers.....if someone has them, please post a link and we'll all be a bit wiser on this subject. What I think you probably have are a lot of "market specific" or "institution specific" rules about offers and how they are handled. I will make a very broad assumption here and say that if you place an offer without specific instructions about it's ending date, then that offer would be considered "GTC--good until cancelled"...
couple of points------we modified our offer system 3+ years ago and now only accept offers for a maximum of six weeks.....so right now if you leave us an offer on Sept 20, it will be good until Oct 31.....if you leave us an offer on Sept 10 it is only good until Sept 30......our change was motivated by the same "forgotten offer" issue you are working through now, and we wanted to avoid that and provide the best customer service. We are very specific in asking or an ending date when accepting offers---some folks only want an offer good until end of this or next week and some want it longer..
Secondly---we do not accept anything except "firm" offers.....no calls to see "do you want this"??.....reason----because a lot of offers get booked on the "wild and crazy" days and although our intent is to call every filled offer ASAP, it can take awhile .....majority of grain biz these days is being done in high volume multi-location offices with computers running info back to a central hedge desk somewhere in the organization and we are all just trying to do our job in the most efficent manner and keep hedge book square and true to the full extent possible.
to yahoo's point about basis widening----yes, that is a risk with offers in a rapidly rising futures market. If the sale is being motivated by a need for space in the near-term, one strategy is to convert the offer to a basis contract with a pricing order. If the motivation is a specific price, and you have space available, then you may want to consider other strategies such as hedging and waiting for possible basis recovery.
Offers can be advantageous to the seller as well. I've seen cash offers "swept" when price was within a few cents of the seller's target, but "not quite there yet"..
Ray J
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Offer rules
