Most futures
transactions do not result in physical delivery of the commodity...
Depending on their strategy, futures traders usually
make conscious decisions either to avoid delivery or to accomplish it. That is,
they either make an offsetting transaction ahead of the delivery, thereby
avoiding physical coffee being tendered to them; or they consciously force the
exchange to deliver (tender) physical coffee by allowing the contract to fall
due. Delivery must be completed between the first and the last trading days of
the delivery month, although the exact terms vary from one market to the
other.
While the futures contract can be used for delivery,
its terms are not convenient for all parties. For example, the terms of delivery
of futures contract provide the seller with the exclusive right to select the
point of delivery. This situation can obviously create difficulties for the
buyer. In addition, the actual coffee delivered, while acceptable under the
futures contract, may not match the buyer's specific quality needs.