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