Cargill AgHorizons, Wells Fargo to launch grain-equity tool to help producers forward contract

Cargill AgHorizons and Wells Fargo are collaborating on a new contracting program designed to help farm families capitalize on grain-contracting opportunities in today's volatile markets. The offering, called EliteHEDGE, will be available in all markets jointly served by Wells Fargo and Cargill AgHorizons.

EliteHEDGE enables growers to leverage the value of their deferred-delivery grain sale commitments to Cargill via a Wells Fargo line of credit, which is used exclusively to offset the hedging costs of the contract until final delivery of grain to a Cargill-approved delivery point. The arrangement provides eligible producers greater access to credit in contracting for the sale and delivery of their grain.

According to Cargill officials, no other comparable vehicle is available to help producers underwrite the higher costs of forward contracting grain in a market that has been remarkable in its volatility.

“In times of unprecedented volatility and skyrocketing input costs, many producers have cited the growing inability to forward-contract grain more than 12 months out as their biggest concern,” said Cargill AgHorizons President Dan Dye. “EliteHEDGE provides the benefits of transparency — farmers can see exactly the hedging costs needed to carry their forward contract to delivery.”

With approvals from Cargill and Wells Fargo, a grain farmer can use the EliteHEDGE offering to fund deferred contracts beginning with the 2009 crop season and beyond. “We're pleased to partner with Cargill in its offering of the EliteHEDGE product to farm families,” said Dana Reddington, regional Business Banking manager for Wells Fargo in Minnesota. “EliteHEDGE helps farmers better manage their risk during these times of extreme volatility and escalating costs.”

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