A Spot Sale is when the grain is sold at the current market price. The price is not determined before the sale. If a seller believes that prices will continue to decline, then this is the time to do a spot sale.
Ÿ Eliminates further price risk
Ÿ Payment for grain is immediate
Ÿ Prevents storage and interest costs
Ÿ Quality risk of grain deterioration with storage is passed on to buyer
Ÿ Seller cannot take advantage of improvement of prices in future.
Ÿ Availability of transportation may make spot sale unavailable.