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Agriculture and physical goods
A crop’s local price can differ from futures because of where and when the business buys or sells it.
- Benchmark
- CBOT soybean futures
- Carried by the business
- Barge bid on the Illinois River
- Settles on
- USDA AMS grain bids
Illustrative exampleA grain merchant on the Illinois River
This hypothetical example uses public events and does not describe a client.
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- 01The business
The merchant buys soybeans at its own posted bid and hedges the flat price with CBOT futures.
- 02What happens
When the Mississippi runs low, barges load light and freight jumps, and the bid at the elevator falls further below futures than planned.
It happened in the autumns of 2022 and 2023.
- 03What the contract names
The contract names the Illinois River bid in the USDA AMS daily report, a September to December window, and a strike on local basis.
- 04How it pays
If basis stays below the strike for five report days, the contract pays a third of its maximum, rising to the full amount 20 cents further down.
The existing futures hedge remains in place.
Share of the maximum it pays
- 33%At the strike
- 67%−10¢ per bushel
- 100%−20¢ per bushel
Observed dataBenchmark history
These prices provide market context for the worked example.
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Public benchmark
481.72USD per metric ton
+113.15 (+30.7%) over 12 months
International Monetary Fund, via FRED. Source checked Nov 1, 5:21 PM UTC.
Soybeans, global price: 368.57 on September 2025, 481.72 on September 2026. Low 368.57 on September 2025, high 481.72 on September 2026. Values in USD per metric ton.
This monthly global soybean price differs from CBOT futures and local elevator bids.
View source dataIllustrative exampleWhere the hedge stops
This diagram illustrates how a business cost can move away from a benchmark; it does not show observed prices.
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These curves illustrate a possible pattern and do not represent observed prices.
Illustrative drawing, not market data. Barge bid on the Illinois River against CBOT soybean futures; the shaded gap between them is the spread. A faint band marks the window a contract would cover.
CoverageRisks we can structure
Contracts can address the following risks.
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- 01River and barge basis
- 02Interior freight from the elevator
- 03Inputs delivered before planting
- 04Low-water draft limits
- 05Tariff lines on imported goods
The processFrom exposure to payment
We start with one business risk and assess whether we can define a contract around it.
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- 01
Define the exposure
Tell us the event, the place, the period, and what it costs the business.
- 02
Write the terms
Oros names the record, the trigger, the price, the payment, and the limit.
- 03
Find the capital
A counterparty takes the defined risk for a premium, with payment capped in the terms.
- 04
Settle on the record
As calculation agent, Oros applies the terms to the named record and states the result.
Discuss your business risk.
In a thirty-minute call, we can discuss what could change, where and when, and what it would cost your business.