The price risk every corn grower carries
From planting to harvest, a corn crop is an unpriced asset sitting in the field. Seed, fertilizer, chemical, fuel, and land costs are largely known by spring. Revenue is not. A strong national yield, weak export demand, or a shift in feed and ethanol usage can push corn prices sharply lower between the time you commit your inputs and the time you haul grain.
Corn futures trade in 5,000-bushel contracts, and a move of fifty cents a bushel is unremarkable in a volatile year. On a farm raising a few hundred thousand bushels, that is the difference between a good year and a bad one. Doing nothing is a decision too - it is a decision to be fully long the corn market until the day you sell.
Selling forward without margin calls
The classic hedge is selling corn futures against expected production. It works, but it comes with mechanics many farm operations do not want: margin accounts, daily mark-to-market, and margin calls when prices rally after you sell. A farmer who sells futures in June and watches the market rally into July owes cash on paper losses even though his crop hedge is working exactly as intended. That cash strain has pushed many growers out of sound hedges at the worst time.
A forward contract through CCS prices your bushels today for delivery later, with no margin calls and no daily settlement. The terms - bushels, delivery window, pricing basis - are set around your operation rather than the exchange's standard contract. CCS's Scale-In hedge program applies this forward-contract approach, building coverage in stages across the season instead of pricing everything on a single day.
How much of the crop to price
Very few farmers forward-price their entire expected crop, because production risk is real - a drought or flood can leave you sold bushels you do not have. Common practice is to cover a conservative share of proven yield, then add coverage as the crop's condition becomes clearer through the growing season.
Forward pricing also cuts both ways: if the market rallies after you price, those bushels stay priced. The goal is not to beat the market; it is to lock in a margin over your cost of production when one is available, so the farm's year does not depend on where corn happens to be in October.