Reports E/CTRM Software – To Build or Buy?

CTRM for Ags & Softs be confused with futures contracts. The cash price for the cotton is the current local price for the specific product to be transferred. In the cotton futures market, participants buy and sell a price for a standard grade of cotton. The futures transaction centers around trading a futures contract based on physical cotton (or its cash equivalent) at a price determined in an open auction – the futures market. The futures price is the price one expects to pay, or receive, for cotton at some future date. “As commodity price discovery and supply chain networks become increasingly commoditised, performance is the last bastion for business owners to differentiate themselves from the competition. Today, it is not who you know but what you know. Better processes and data management and analytics will get you there. That is what we promise and deliver to our clients.” Richard Williamson – Generation10 The futures contract is a standardized legal commitment to deliver or receive a specific quantity and grade of a commodity or its cash equivalent on a specified date and a specified delivery point. The standardization of the contract allows market participants to focus on the price and the choice of contract month. Traders in the cotton futures market are primarily interested in risk management (hedging) or speculation, rather than the physical exchange of actual cotton. Although delivery of physical cotton can take place under the terms of the futures contract, few contracts actually lead to delivery. Instead, purchases of contracts are usually matched by offsetting sales and vice versa before the contract expires, and no physical delivery takes place.In addition to its pricing functions, the cotton futures market helps to support standards of quality and grade that can be applied throughout the industry. The Cotton Supply Chain Cotton is an annual field crop grown across a wide variety of regions of the world with the largest areas of production being China, USA, CIS, West Africa and Brazil. It is produced all year round from both hemispheres, and each area of origination has its peculiarities to deal with, but the USA has the most stringent rules, export requirements and quality attributes making it the most complex set of CTRM software requirements for cotton. Various quality attributes and weight are important, impacting price that can be measured and tracked at the level of an individual bale. Those quality attributes and weight can also change during the life of the bale, which is tracked from the point of origin to point of consumption with many ‘touch’ points along the way. The Cotton plant generally requires large amounts of sunshine to prosper, but it is also quite prone to insect infestations and damage, and it is also quite a capital-intensive field crop.It is harvested either by hand or machine, and countries like China, India and those in West Africa still rely heavily on hand picking, whereas other countries like the United States and Australia are mostly machine harvested. The two methods of machine harvesting are by spindle or stripper. Cotton is often stored in ‘modules’ that allow the cotton to be stored without losing yield or quality prior to ginning. Specially designed trucks pick up modules of seed cotton from the field and move them to the gin. Modern gins place the modules in front of machines called module feeders that then literally break the modules apart and “feed” the seed cotton into the gin. Other gins use powerful pipes to suck the cotton into the gin building. Once in the cotton gin, the seed cotton moves through dryers and through cleaning machines to remove gin waste such as burs, dirt, stems and leaf material from the cotton. Then it goes to the gin stand where circular saws with small, sharp teeth pluck the fiber from the seed. From the gin, the fiber and the seed go their different ways. The ginned fiber, now called lint, is pressed together and made into dense bales each weighing about 500 pounds. To determine the value of the cotton, samples are taken from each bale and classed according to fiber length (staple), strength, micronaire, color and cleanness (see below for more details). Producers usually sell their cotton to a local buyer or merchant who, in turn, sells it to a textile mill. © Commodity Technology Advisory LLC, 2016, All Right Reserved “I've always felt O for Operations should be part of the CTRM acronym, especially in Agriculture and Soft commodities.” Richard Williamson – Generation10 20

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