The seller holds on to the grain until a later date to take advantage of a market rally.

Advantages:

Ÿ         Allows the seller to take advantage of grain price improvement

Disadvantages:

Ÿ         Seller’s grain quality may deteriorate while in storage.

Ÿ         Seller may have storage costs while waiting for a rally in the grain market

Ÿ         If the market declines, the seller is at financial risk.

Ÿ         Money will be tied up in storing the grain and therefore, unavailable to be used for paying off debt or earning interest.