(1) The amount a price would be reduced to purchase a commodity of lesser grade; (2) sometimes used to refer to the price differences between futures of different delivery months, as in the phrase "July is trading at a discount to May," indicating that the price of the July future is lower than that of May; (3) applied to cash grain prices that are below the futures price

Source: National Futures Association; published here with permission. This publication (Glossary of Futures Terms - An Introduction to the Language of the Futures Industry) is the property of the National Futures Association.

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