The grower “calls” the futures price and Calcot markets the basis. An initial advance on the basis is approved by Calcot’s Board of Directors prior to harvest. As Calcot markets the crop, progress payments are made on the basis with final settlement being paid in September of the following year.
- Grower maintains significant control over cotton pricing
- Grower receives fixation price, plus or minus a season-average basis
- Grower can use call and/or put options to preserve upside potential, limit downside risk
- Grower gets accelerated cash flow
- Possible to get the highest price of the marketing year
- Low commission charge
Contact your local field representative to learn more about Calcot’s Call Pool.