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Basis Grade

What does Basis Grade mean?

This refers to the minimum specific grade that is listed on a futures contract.  Should the deliverable commodity differ from the basis grade it could be subject to a different price than what was agreed to on the futures contract.

Futures Knowledge Explains Basis Grade

As you can imaging with a commodity like wheat, there are differing levels of quality and yield.  Some might have too much moisture, grain that is too moist is susceptible to deterioration.

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