Rolling a HTA Contract and the Year to Year Risk and Reward

Note: This article is available for our annual subscribers or you can buy it separately at our shop here How HTA Contracts Are Rolled to the Next Crop Year and the Risk of Inverted Market

The market plan I recommend includes your merchandiser allowing you to roll your undelivered bushels, should you come up short on production, to the next crop year providing you take the risk of the old crop to new crop spread. That is not as dangerous as it sounds.

Usually, you gain on the roll to the next crop year, but there are years when you will lose value on the roll. Those are years when the market is “inverted”, meaning the new crop price is below the old crop price.

Here is the math when rolling a HTA contract from one crop year to the next:

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