What is grain marketing?

11th January 2023

This amounts to huge quantities of grain collected in the relevant harvest windows, but not all of it can be supplied to the customer at the same time, so what exactly happens to it then, and how can a farmer best maximise the use and value of their crop?  Step forward Grain Marketing.

So, what is Grain Marketing…

Grain marketing is the strategy employed by farmers to structure the selling of their grain.  Most grain markets are global commodity based, and therefore the market price can move rapidly both up and down.  The price is influenced by multiple factors, not only the traditional economics of supply and demand but also a multitude of other global influences including currency, weather, and political issues.

Recently both the impact of Covid and the invasion of Ukraine by Russia have created significant volatility in the market.  The fact is that the day a farmer sells his grain is likely to have more impact on the margin he achieves than his on-farm cost management or the physical yield he achieves.

As such the support of a strong collaborative grain trading partner is now more critical than ever for farmers.  It is important they work closely together with the grain trader supplying good market information and advice.

We offer a number of different routes to market for our farmer growers, including the following:

• Pool contracts.
  The farmer commits a tonnage to a selected pool or pools and gives the responsibility over to us to market the pooled grain.
  We offer four movement periods and cash advances (Harvest, Autumn, Spring, Long).  We also offer a two risk management levels – standard and higher risk.

• Minimum Premium contracts for Milling Wheats and Malting Barley

These contracts enable the farmer to lock in a minimum premium for his quality wheat or barley but also retain the ability to fix both the base price and the actual premium at any time up to the month before the month of movement.

• Harvest Move, Price Later contracts for Feed Wheat, Feed Barley, Milling Wheat, Malting Barley and OSR
  These contracts enable the farmer to have his committed grain moved at harvest but he is able to fix the price at any time up to the end of a fixed period. (This helps avoid the potentially discounted price for harvest grain)
• Upside Contracts for Feed Wheat, Milling Wheat, and Malting Barley
  The farmer is able to lock into a guaranteed base price and also receive a share of any subsequent upside achieved.
• Futures Linked Contracts
  Wheat contracts can be linked to the London ICE futures market and priced up at any time up to the month before the month of movement
• Bespoke Contracts
  We are happy to tailor contracts to suit a farmer’s particular requirements.

The above are just some examples of what we can offer.  Our aim is to work with you, the grower, to understand your requirements and then pull together the best marketing strategies.  We have a team of experienced traders backed by some of the best market information and research in our industry.

If you’d like the support of a strong grain trading partner then get in touch to see how we can help you.