ollie989898
Member
If you sell for a certain month if that month expires that tonnage not moved is no longer part of the contract and you have no obligation to load it. If the price has fallen they owe you some money just same as when the shoe is on the other foot and you are short of your contract tonnage they buy the tonnage in and pay you the difference if the market is down or you pay them the difference if the market is up.
Hold on: 'if the price has fallen they owe you some money'???? How do you work that out?
The agreed price is the agreed price. The buyer is contracted and committed to purchasing the stated volume for the agreed price, the movements in the meantime don't matter a fudge. Yes, if he does not arrange movement in the required month he is required to give you a carry as reflects the fact you have held the risk and stored the stuff for longer than was stated. I don't give you more money because the price has dropped, just for the same reason I don't give you more money if the price rises.
You are indeed expected to make up any shortfall if you fail to provide the agreed tonnage; I've agreed to take 500 tonnes, and made my own plans based on that fact, if you only provide 450 tonnes, I am out of pocket and suddenly my own plans are scuppered. For the same reason, I can't suddenly decide I can only take 450 tonnes if you have agreed to supply 500. What if the grain price had fallen out of bed in the time between the contract being made and harvest? I would then be at liberty to go and buy 50 tonnes for much less, leaving you out of pocket. How is that fair?