Grain contract types in Canada

Every grain contract fixes some things when you sign and leaves others open. What's fixed is what you can count on; what's open is what can still move, and who sets it and by when. Here is what each common type commits you to, from the buyers' own descriptions and the provincial and federal rules. It says what each one is, not which to sign.

By Ruslan Glick, Winnipeg · Updated 28 October 2026

Names and terms differ from buyer to buyer. Alberta's agriculture ministry puts it plainly: "Producers should check with each grain buyer for the type and conditions of contracts available." Read the terms on your own contract; where this page quotes a buyer, it says which.

And two things that sit across all of them: being paid later on purpose, and the clauses every contract has.

Fixed price, or deferred delivery contract

The whole price is set when you sign: the futures and the basis, along with the quantity, the grade and the delivery period. Alberta's glossary describes it as an agreement to "deliver a specified quality and quantity… at a specified location at a specified date in the future for a specified, guaranteed price." Viterra and Bunge call theirs a Fixed Price Contract, "also commonly known as a Deferred Delivery Contract (DDC)."

What you commit to

Delivering that grain in that window. In Alberta's words, "the amount of product specified in the contract must be delivered, or penalties may apply." See shortfalls below.

What you give up

Any later rise in the market, on that grain. Viterra's sheet: "you won't benefit from potential futures market increases."

Payment

On delivery, unless the contract says otherwise. Some buyers let you put the payment into the next tax year (Cargill lists "defer payment to a new tax year" as a feature of its Deferred Delivery contract); see deferred payment.

Basis contract

The basis is set now and the futures price later. Viterra describes it as locking "the basis portion… while keeping the futures price open." The quantity, grade and delivery period are fixed like a fixed-price contract.

The pricing deadline

The futures have to be set by a date in the contract. What happens if you don't is the buyer's rule, and it is worth knowing before the date. Viterra and Bunge's: futures "must be priced or rolled by the pricing deadline, otherwise, they will be automatically priced at the market close on that day." Paterson's: futures are set "by the last business day of the month before the delivery month," or the contract can be rolled to the next futures month.

Rolling

Moving the futures to a later month. In Viterra's terms "the spread between futures months will be included in the adjusted basis," so the basis on the contract changes.

What can still move

The futures, until you price them. The delivery obligation is the same as a fixed-price contract's.

Futures first, or open basis

The opposite of a basis contract: the futures are set now and the basis later. Alberta's glossary calls it an open-basis contract, "also called futures-first contract or to-arrive contract," which locks "the commodity's futures price, the amount to be delivered and the delivery period… The final price is determined at a later date, when the seller locks in the basis prior to or up to the day of delivery, depending on the details of the contract."

Buyers name it differently: Cargill's Futures First ("Set basis on or before your delivery period"), Viterra's Fixed Futures, Paterson's Futures Only, where the basis and the delivery period both stay open and it becomes a deferred delivery contract once they're chosen.

Minimum price contract

A floor under the price, bought with an option. Viterra and Bunge's Minimum Price Put sits on a basis contract: "If futures prices move lower than your strike price, you still receive your minimum price." Their Minimum Price Call sits on a fixed-price contract and "can only be re-priced once."

What it costs

The option and a fee. Viterra: "A marketing fee is deducted directly from the grain settlement." Alberta notes the floor is usually lower than a deferred delivery price offered the same day, by the cost of the option plus an administration fee.

Target price order

Not a contract until it fills. You name a price; if the market reaches it, the sale is made at that price. Alberta calls it a grain pricing order, "often only in effect for a specified time period, usually 90 days." Paterson offers 30, 60 or 90 days, and if the target isn't reached there is "no obligation to deliver." Viterra lets you set a target inside a basis contract before its pricing deadline.

Production contract and Act of God clauses

A production contract is about acres rather than tonnes: you agree to deliver "some, or all, of the production from a specified number of acres or tonnes" (the Mercantile review of producer contracts for SaskCrops and APAS, 2022). Alberta notes that production contracts usually don't "specify the price or the total volume of grain to be delivered."

Act of God clauses

A clause that lets you off delivering grain that wasn't grown because of drought, hail, frost or the like. They are rare outside production contracts: the Canadian Canola Growers Association's contract guide (2024) says Act of God or force majeure clauses that benefit the farmer "are rare in delivery contracts… may be available at a premium, upon consent of the grain buyer, or with specialty crops and production contracts." Some delivery contracts say the opposite outright; one sample clause in the guide: "The Seller is absolutely and unconditionally required to sell and deliver the Grain… whether or not the Grain is grown."

Where there is one, it has a limit

Usually a set amount per acre. Viterra and Bunge's 2026-27 Clearfield canola production contract, for example, has "Special Event (Act of God) protection up to .9 mt/ac (40 bushels) on basis contracts" and ".25 mt/ac (11 bushels) on fixed price portion."

Pool

Your grain is sold along with others' over a period, and you are paid the average. Alberta describes pool returns as "the sum of all revenue achieved on all sales less the costs of operating the pool," a price that "reflects an average price over several weeks, months or a year's worth of market sales activities." The price isn't known when you join; check the fees (Alberta names "underwriting fees, adjustments and pool management fees") and when each payment comes. Since the Canadian Wheat Board, pools are run by individual companies, and which ones offer them changes year to year.

Spot, or cash, sale

Sold today at today's price, delivered and paid now. Alberta's glossary: "a market of immediate delivery to the buyer and payment to the seller for the product. Also, referred to as the 'cash market'." Nothing is left open, and nothing is committed beyond that load.

Deferred payment and tax-deferred cheques

Any of these can be paid later on purpose, usually to move the income into the next tax year. Two sets of rules meet here.

The tax rule

Section 76(4) of the Income Tax Act: when a cash purchase ticket for grain delivered to a primary or process elevator entitles you to payment after the end of the tax year, the amount is income in the year after the grain was delivered. "Grain" there means "wheat, oats, barley, rye, flaxseed, rapeseed and canola produced in Canada" (s. 76(5)), so pulses, corn and soybeans aren't covered by it. Ottawa considered removing the deferral in 2017 and kept it. Ask your accountant how it applies to you.

Payment protection

On the Prairies, the Canadian Grain Commission's Safeguards for Grain Farmers Program covers a cheque or cash purchase ticket for 30 days from the day it was issued, or until 90 days from delivery, whichever is shorter. A post-dated cheque is covered "30 days from the date it was issued, regardless of the date on the cheque." The Commission's own words: "when you accept a deferred payment that falls outside of program eligibility periods, you are also opting out of payment protection." The payment protection checker works out the date for a delivery.

In Ontario

Agricorp's Grain Financial Protection Program covers canola, grain corn, soybeans and wheat sold to licensed dealers, and its cover shrinks as the deferral grows: up to 95% with no deferral, 50% for 1 to 45 days, 40% for 46 to 90, 30% for 91 to 135, 20% for 136 to 180, and none past 180.

What every contract has

The delivery period

When the grain has to move. The buyer often calls it in, sometimes all at once, sometimes in parts. The canola growers' guide found extension clauses ranging "from 30 to 180 days with an average of 90," sometimes without notice, and some contracts let the buyer change the delivery point. Write down the first and last day as printed.

The grade

The contract is for one grade. "Grain buyers are only obliged to accept the grade and quantity written into a contract. Acceptance of a grade not specified… is at their sole discretion and subject to trade discounts" (the canola growers' guide). If your grain grades lower, the downgrade calculator compares delivering it at the discount with buying the contract out.

Your right to a second grade

Delivering a regulated grain to a licensed primary elevator, you can ask the Canadian Grain Commission for a Final Quality Determination (formerly "Subject to Inspector's Grade and Dockage") within 7 calendar days of delivery, and payment "must be based on the results." The canola growers' guide notes it isn't available at process elevators such as crushers, or for factors the Commission doesn't grade. More in grade or dockage wrong?

Shortfalls and buyouts

Grain you can't deliver is usually bought out. The canola growers' guide gives the usual formula as "the difference between the contract price and the replacement cost, plus an administration fee," with fees of "$10 to $30 per tonne"; "in most cases, the contract cannot be cancelled without buying it out." The buyout calculator works one out.

Grain the buyer doesn't take

The other way round: under the Canada Grain Regulations, a delivery contract with a Commission-licensed buyer has to compensate you for grain the buyer hasn't accepted by the end of the delivery period (as the canola growers' guide explains). Grain Farmers of Ontario notes it isn't a standard clause at facilities the Commission doesn't license.

Deductions

Elevation, freight, drying, cleaning and check-off levies come off the settlement. Licensed elevators file their handling charges with the Commission and may charge "the same or less than those filed"; what elevators charge lists them. Shrink for drying has to follow the Commission's formula (the shrink calculator uses it).

Set-off

Some contracts let the buyer take what you owe them, an input account for example, out of what they owe you.

Keeping track of them

The part of a contract that's still open is the part to watch: a basis contract's pricing deadline, a futures-first contract's basis, a target's end date, a deferred cheque's 30 days. How to track grain contracts goes through what to write down for each and how to check the settlement against it.

GrainPosition keeps each contract with how it's priced (fixed, basis, futures first, price later, managed or minimum), what's set and what's still open, and its price-by date, which shows in Coming up a month ahead, beside the delivery windows. Take a photo of the contract and it fills these in for you to check. It's free during early access.

Questions

What is a deferred delivery contract?

In Canada it usually means a fixed-price contract: the futures, the basis, the quantity, the grade and the delivery period are all set when you sign, for delivery later. Viterra and Bunge describe their Fixed Price Contract as "also commonly known as a Deferred Delivery Contract (DDC)." The grain has to be delivered, or penalties may apply.

What happens if a basis contract isn't priced by the deadline?

It depends on the buyer. Viterra and Bunge's terms say futures "must be priced or rolled by the pricing deadline, otherwise, they will be automatically priced at the market close on that day." Check the deadline and what happens at it on your own contract.

Does a grain contract have an Act of God clause?

Delivery contracts rarely do. The Canadian Canola Growers Association's contract guide says Act of God clauses that benefit the farmer "are rare in delivery contracts" and are more often found in production contracts and with specialty crops. Where there is one, it usually covers a set amount per acre, not the whole crop.

How long is a tax-deferred grain cheque covered by payment protection?

Under the Canadian Grain Commission's Safeguards for Grain Farmers Program, a cheque or cash purchase ticket is covered for 30 days from the date it was issued, or until 90 days from delivery, whichever is shorter. A post-dated cheque is covered for 30 days from the day it was issued, regardless of the date on it.

Sources

• Alberta Agriculture: crop contracts, how price pooling works, and its agricultural marketing glossary (D–E, N–O, S)
• Canadian Grain Commission: payment protection eligibility periods, Safeguards questions and answers, Final Quality Determination, deductions for handling grain
• Income Tax Act, section 76; Manitoba Co-operator on the 2017 decision to keep the deferral
• Agricorp: Grain Financial Protection Program
• Canadian Canola Growers Association, Grain Contracts Guide (2024); Grain Farmers of Ontario, Grain Contracts Guide; Mercantile, producer contract review (2022)
• Buyers' own descriptions: Viterra and Bunge (fixed price, basis, minimum price, 2026 Clearfield canola), Cargill, Paterson