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New hedging and cash grain commodity transaction service
Posted: Saturday, November 15, 2008 3:06 pm
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The world is experiencing a 'credit crunch', resulting from concerns that lenders don't trust borrowers all that much. In this financial climate, whom can you trust? Food growers, at least. This new program acknowledges the strength -- indeed, the indispensability -- of food growers.

DuPont business Pioneer Hi-Bred and Farms Technology, LLC have announced a new proprietary service technology available through the MarketPoint resource website to facilitate grain commodities hedging for buyers by providing concurrent electronic hedge orders and cash commodity transactions.

"The e-Pit technology on the MarketPoint resource is a win-win; it is designed to allow growers to obtain their asking prices and buyers to obtain their futures hedges with limited slippage," said Jason Tatge, CEO of Farms Technology. "Fully automated hedging and purchasing of grain allows producers to execute cash sales of grain anytime the markets are trading, day or night. For grain buyers, it gives their customers the opportunity to lock in purchases that are automatically hedged around the clock when their competitors can't."

Grain buyers currently must contact their commodities broker by phone or Internet to place their hedge when they buy corn from a producer. The e-Pit technology allows buyers to automatically purchase corn from growers by instantly selling offsetting futures contracts to execute hedges. The service helps protect the buyers' margins and has the potential to significantly reduce price risk involved with "slippage" due to the velocity of today's price changes on the exchanges.

The e-Pit technology monitors cash offers against every tick of the futures market from 9:30 a.m. to 1:15 p.m. and from 6 p.m. to 6 a.m. using the Chicago Board of Trade, Kansas City Board of Trade and Minneapolis Grain Exchange electronic futures markets.

The e-Pit technology currently works with futures commission merchants R.J. O'Brien, Rosenthal Collins Group and FCStone and is working on adding others in the near future.

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