September 24, 2009
Seventeen Nations at NCI’s Grain Procurement Management Course
For Immediate Release
Fargo, N.D., USA – Thirty-nine grain buyers from 17 nations are attending the 2009 Grain Procurement Management for Importers short course at Northern Crops Institute (NCI), Fargo, N.D., to learn how to make more effective purchases in the U.S. grain marketing system.
The course runs from September 21-30.
Grain buyers attending the course are from Japan, Philippines, Korea, Mexico, Italy, Indonesia, Colombia, China, India, Jordan, Malaysia, Netherlands, Poland, Romania, Singapore, Canada, and St. Vincent and the Grenadines, West Indies. They represent large and small food processing, feed manufacturing, and trading companies that import and trade hard red spring wheat (HRS), durum wheat, corn, soybeans, barley and other commodities.
“The participants of this course come to NCI to learn about the purchasing tools that will help them navigate their way through the unpredictable grain and commodities markets. One of our main objectives for this course is to help our customers understand the markets and how to purchase grain, so that they will be long-term customers of U.S. grains,” says Brian Sorenson, NCI Director.
Dr. Bill Wilson, NDSU professor of agribusiness and applied economics, is the lead lecturer for the course.
U.S. Wheat Associates and U.S. Grains Council are sponsoring several participants.
“In Asia, and in China in particular, the type of people who are selected to come to this course often have a very basic understanding about how to use the futures market, and even with the cash market, how to monitor and analyze it,” says Matt Weimar, Regional Vice President, U.S. Wheat Associates, Hong Kong. “We think NCI’s course is more comprehensive and develops technical aspects. Bill Wilson helps them understand some of the requirements for gathering long-term historical data and the value of putting time into that.”
“This year we are getting more interest in HRS wheat. In fact, I understand from one of the participants that they made a small, 35,000 metric ton new crop purchase for December delivery. Protein is a concern, but they actually targeted a lower protein level, 12-13%, to be able to blend for Asian products. China has an artificially high price, because they are trying to subsidize producers and use the market, setting minimum values for wheat in different classes and varieties. Spring wheat and soft white have recently become competitive with new crop prices. We have inquiries about hard red spring and hard red winter wheat, so there’s lot of interest,” Weimar concludes.
Joe O’Brien, Regional Director, U. S. Grains Council (USGC), Jordan, is accompanying two participants from India, who are sponsored by USGC. “U.S. Grains Council has been active in India for a number of years,” says O’Brien. “However, many buyers lack the knowledge about how to import or how to use financial instruments like options or futures in their grain purchasing. We regard this course as a chance to educate them on how to purchase U.S. commodities and how to deal with the markets.”
“India is a major producer of food grains for themselves, especially wheat and rice. They maintain significant stocks of these commodities that would normally see them through any severe weather catastrophes like droughts or floods. However, we feel at some future point, India’s demand will outstrip its local supply. When that occurs, we want them to be ready to import U.S. commodities,” O’Brien concludes.
Visiting farms in the region to see the crops in the field is an important segment of the course. During the first week of the course, the group tours the Hunter (N.D.) Grain Company elevator with Paul Skarnagel and the Jim Howe farm near Casselton, N.D.
“The grain trade has expressed concerns about the status of the grain crops, particularly HRS wheat. Because of too much moisture and cool conditions, farmers planted their crops very late and they developed very slowly. In the last few days, thanks to unseasonably warm weather, we are close to finishing the spring wheat harvest. This warm weather has really helped finish the late season crops in our region, of which soybeans and corn are the biggest concern to traders. There’s still a long way to go, however, before we get it all into the bins or to the elevator,” Sorenson cautions.
At the end of the week, course participants will travel to Duluth, Minn., where they will tour the Duluth Seaway Port Authority with Executive Director Adolph Ojard, and the CHS Export Grain Terminal with Superintendent Dick Carlson.
At the Minneapolis Grain Exchange (MGE) during the course’s second week, short course participants will meet with grain traders, who will discuss commercial grain export trading practices. Roger Hipwell, MGE Vice President for Business Development, will explain the MGE’s historic open-outcry trading floor. Randy Bailey will host a tour of the CHS Cash Marketing Laboratory.
Superintendent Greg Oberle will explain the grain transport system on the Mississippi River during a tour of CHS Barge Facility at Savage, Minn.
Additional short course speakers include: Mark Bagan, Minneapolis Grain Exchange; Roger Baker, CHS; Art Boline, GIPSA/USDA; David Bullock, Ph.D., FC Stone; Tanya Coakley, Trading Technologies International; Austin Damiani, Frontier Futures; Ron DeJongh, Columbia Grain; Ross Edwards, BNSF Railway Co.; Ray Grabanski, Progressive Ag; Julie Heinz, CHS; Roger Hipwell, MGE; Mike Klein, CHS; Mike Krueger, The Money Farm; Brian McLaughlin, Trading Technologies International; Randy Narloch, ADM-Benson Quinn; Erica Olson, N.D. Wheat Commission; Darcy Rasmussen, N.D. Grain Inspection Service; and Steve Wirsching, U.S. Wheat Associates.
This year’s topics include: U.S. grain handling and transportation logistics, cash and futures markets, basis, U.S. grain grading standards, commodity analysis, hedging principles, options, exporter merchandising and contracting, price risk management, purchase quality specifications, role of railroads in U.S. exports, grain situation and outlook, buyer/seller relations, managing supply chain, international contract and arbitration, simulated electronic trading, and managing ocean freight risks.
Northern Crops Institute supports regional agriculture and value-added processing by conducting technical education and services that expand and maintain domestic and international markets for northern-grown crops.