Converting the launch period of grain futures into cash is beneficial to grain management enterprises, flour processing enterprises and grain enterprises to receive the spot smoothly, saving the expenses of loading, unloading, sorting and packaging.
2. Cash transfer enables buyers and sellers to flexibly choose the place, time and grade of delivery.
Spot can meet the needs of processing enterprises and production and operation enterprises for different grades of goods. Processing enterprises and production and operation enterprises can choose the delivery place flexibly, which reduces the delivery cost and makes up for the flexibility lost in the process of futures standardization.
3. Cash conversion can improve the efficiency of capital utilization.
Cash conversion can not only make production, management and processing enterprises avoid price risks, but also improve the efficiency of capital utilization. If the processing enterprises deliver goods collectively at the expiration of the contract, they will have to take out millions or even tens of millions of raw materials at one time, which will increase the inventory and occupy a lot of money at one time. Installment payment can enable enterprises to buy back raw materials in batches according to processing needs, thus reducing capital pressure and reducing inventory. Production and operation enterprises can also receive funds for production in advance and in batches.
4. Futures cashing is more advantageous than "buying and selling spot after liquidation"
The spot exchange for futures enables buyers and sellers to determine the spot transaction price and the corresponding futures closing price at the same time, thus ensuring that the futures market risks are locked at the same time. If the buyer and seller buy and sell the spot after closing the position, after the spot price of both parties is agreed, it may bring losses to one party due to the fluctuation of futures price when closing the position.
5. Cash for forward trading is more favorable than forward contract trading and futures trading.