What is the PaceSetter contract? • A PaceSetter contract allows growers to receive a price

determined by the average of the closing futures prices over a set period of time

• PaceSetter averaging periods can be positioned to take advantage of historical price seasonality – Historically, new crop futures for spring tend to have a weather premium built into them to take into account the uncertainty of the upcoming crop year

• With the PaceSetter contract, growers can ensure the average futures price over a given period of time on a portion of their production

Who should use this contract? • Growers that anticipate market appreciation but do

not want to monitor the market on a regular basis

• Growers that would like to forward sell their production to take advantage of spring market rallies prior to harvest

• Growers that are concerned about selling at the market low or below average

When should this contract be used? • When growers want to stay in the market for an

extended period of time and minimize the risk of market declines

• When growers want to participate in seasonal averages prior to harvest delivery

• Anytime a grower would like to reduce overall futures price risk

Benefits: • PaceSetter guarantees that the grower will not sell at

the market low

• By using a Fixed Basis+ contract, PaceSetter allows growers to stay in the market for an extended period of time

• PaceSetter creates the opportunity to take advantage of historical price seasonality

• The grower is guaranteed the average over a period of time, reducing the time required to watch the market

• No storage charges are incurred on grain delivered against an established basis contract

Risks: • The PaceSetter averaging process protects the grower

from selling at the market low but also inhibits them from selling at the peak of the market

• The market may increase then drop substantially prior to the end of the averaging period

– In this situation the lower market values will be included in the average price, having the effect of lowering the overall average

• The market may increase following the completion of the pricing period

PaceSetter®

Grain Marketing Alternative

How It WorksPaceSetter® averaging process

®The Cargill Logo and PaceSetter are registered trade-marks of Cargill, Incorporated, used under licence. © 2015, Cargill Limited. All Rights Reserved. AGH 1536

* Foreign exchange is accounted for in the basis

For more information, drop by your nearest Cargill location, contact your Cargill representative or call

1-888-855-8558 or visit: www.cargillag.ca

Where is PaceSetter getting its prices?Example: Soybeans USD/bu.

DAY 1 DAY 2 DAY 3 DAY 4 DAY 5

$9.80 $9.82 $9.82 $9.83 $9.86

The average over the five days is equal to the sum of the entire daily closing futures prices divided by the number of daily closing prices. Sum of daily close prices:

Sum of daily close prices: $49.13

Number of daily closes: 5

Average: $9.83

New crop historical reference charts help determine optimal seasonal pricing patterns.

Old crop averaging periods are established to satisfy grower delivery requirements.

How does the PaceSetter contract work? Example:

You are planting soybeans and will need to deliver at harvest.

You enter into a PaceSetter contract averaging February 1 through May 31 referencing the November futures. The cost of the PaceSetter contract is USD/bu. $0.08.

At harvest, you deliver to Cargill when the basis is at $2.20* over the November futures.

Scenario 1:Over the averaging period the market hits a low of $9.50, and a high of $10.75.

• The PaceSetter average price closes at $9.71

• The PaceSetter final price is CAD $11.83 ($9.71 PaceSetter average - $0.08 service fee + $2.20 basis*)

Scenario 2:

Over the averaging period the market hits a low of $9.00, and a high of $9.75

• The PaceSetter average price closes at $9.45

• The PaceSetter final price is CAD $11.57 ($9.45 PaceSetter average - $0.08 service fee + $2.20 basis*)