What is a Spot Price?

When a seller creates a listing, they select a range of dates in which the buyer will either pick up the grain from the storage location (ex-farm), or in which the seller will arrange delivery to the buyer (delivered). This is generally denoted in monthly ranges, known as the movement month.

For example, here are some bids below, with the date the listing was created and the movement month offered.

When a seller is looking to move the commodity as soon as possible after the trade has been agreed, this is known as a spot trade. At Hectare, we define a bid as spot if it falls into one of the two scenarios:

If the bid's movement month is equal to the month of listing creation.
If the bid is made after the 15th day of the month and the bid's movement month is equal to the next calendar month of listing creation.

We include the second scenario due to the fact that as the month comes to an end, there isn't enough time to arrange a movement in the same month, and often movement are only offered for the month after.

For example, if you created a listing on the 25th of the month, to move in the same month would only give the buyer 5 days to arrange the movement, which is rarely enough time.

In these cases, the buyer will almost always put the next month as the movement date. So as we get into the back half of the month, we assume that next month's movements are also spot bids.

Now let's look at our example bids again and mark which are spot bids.

Let's run through each example:

Since the bid/listing date in January and the movement month is January, the bid date is within the movement month and therefore this is a spot bid. ✅
As the bid/listing date in January and the movement month is February, the bid date is not within the movement month. The bid is also not in the second half of the month so this is not a spot bid. ❌
Since the bid/listing date in February and the movement month is February, the bid date is within the movement month and therefore this is a spot bid. ✅
As the bid/listing date in February and the movement month is March, the bid date is not within the movement month. However, as the bid was placed on the 20th of February, the bid is in in the second half of the month and the movement month is the month after the bid date, (in this case bid for in February and moving in March) this is considered a spot bid. ✅
As the bid/listing date in February and the movement month is May, the bid date is not within the movement month. The movement month is not in the month after the bid/listing date (in this case March). therefore this is not considered a spot bid. ❌