The seller delivers grain and maintains ownership of the grain.  The grain is stored in a way to ensure its long-term quality.  Grain delivered below the necessary storage standards will be upgraded, but discounts will apply.  

Advantages:

Ÿ         Seller maintains grain title

Ÿ         Seller can avoid selling at historically low prices (i.e., harvest)

Ÿ         After storage fees are paid, seller can haul the grain out of the warehouse

Ÿ         With receipt, the grain value can be used as loan collateral

Disadvantages:

Ÿ         Grain may be discounted more than contracted

Ÿ         Storage costs may be higher than market spreads