CTRM for Ags & Softs
Introduction to Grains, Beans and Seeds
Dry agricultural bulk commodities, like grains, beans and rice, are widely traded around the globe. Used in food products for human consumption, animal feed, and production of edible oils( and recently in the production of motor fuels), these commodities are perhaps the most critical commodities traded today and have well-established industrial processes for their production, transportation, distribution, storage, and transformation.
Overview
While each crop has unique physical characteristics, uses and derivative products, grains, beans, rice and other dry seed crops generally share a somewhat common origin, handling and logistics chain which can be schematically represented as follows:
Trading in food and feed grains is the oldest known commercial activity. However, with the increase of global trade in commodities over the last 100 years, the markets have become more complex and standardization of commercial agreements has become more important. Given that grain crops are not homogenous in their quality or physical characteristics, throughout the logistics chain farmers, elevator operators, processors and traders must establish, track and price these commodities based upon characteristics. In the US, the Federal Grain Inspection Service, a department within the US Department of Agriculture( USDA), was established in 1976 to help ensure a standardized process for grading such crops. The FGIS provides a number of services that standardize the quality and grade factors and ensure consistent valuation of US crop products. From the FGIS website –“ Across America, U. S. grain, rice, and other commodities flow from farm to elevator to destinations around the
“ Our clients require the ability to view an overall consolidated position, pulling together exposures from the various segments of their business, including procurement, logistics, sales, A / R A / P, accounting and hedging. OpenLink is in a unique position to provide this full cross business view of total exposure and operations management for running their business.”
Henry Bonner- OpenLink
world. GIPSA’ s Federal Grain Inspection Service( FGIS) helps move our Nation’ s harvest into the marketplace by providing farmers, handlers, processors, exporters, and international buyers with sampling, inspection, process
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