Solid information in an ever changing market – that’s something every buyer needs. The U.S. Grains Council recently completed a series of advanced trading training for more than 500 potential buyers and import quota holders in three Chinese cities. In these sessions, USGC consultant Jay O’Neil presented a U.S. and world corn supply and demand outlook and also trained participants on using futures contracts and other risk management techniques when purchasing corn. “We are trying to provide solid information that will help these buyers and end-users understand the issues that will impact corn and co-product prices in the near- to medium-term,” said Todd Meyer, USGC senior director in China. “We want our potential buyers to understand the world corn outlook and the changes in the U.S. market due to ethanol production. Through training sessions such as this, we’re able educate these potential buyers so they are ready to take advantage of the market when the timing is right.” In addition, O’Neil was joined by Li Qiang of China JCI Market Analysis Services to focus on the domestic Chinese situation. It is the Council’s goal that by the end of 2007, 20 traders from companies with import quotas will show proficiency using futures contracts and risk management techniques. Other expectations include a total of 500,000 metric tons (19.68 million bushels) of futures contracts will be traded by these companies as part of their procurement and risk management strategies and these companies will import 200,000 tons (7.87 million bushels) of U.S. origin corn by the end of 2008.
Enhancing relationships while also assessing the competition were a few of the key goals of the 2007 USGC Officers’ Mission this week. Spending the first leg of their three-country mission in Argentina this week, USGC officers have met with local government officials, trading company representatives and key end-users there to learn what challenges are facing the Argentine corn industry and what will impact future production. In addition, Council officers met with representatives from Council members Louis Dreyfus Commodities, Bunge North America, Inc., and Cargill. Also, the group has met with industry representatives to review Argentina’s agricultural situation and outlook; discover the challenges facing Argentina’s livestock and poultry industries; and explore the status of Argentina’s biotech policy. “This type of direct contact enables the officers to learn about different markets for U.S. corn, barley and sorghum, what types of activities the Council is undertaking in order to develop these markets; and what opportunities exist for further market development,” explained Ken Hobbie, USGC president and CEO. “We hope to also establish closer trade relationships and enhance understandings between the Council and key third party cooperators with whom the Council works.” Participants in addition to Hobbie include: Vic Miller, chairman; Dale Artho, vice chairman; Jim Broten, treasurer; Rick Fruth, secretary; Davis Anderson, past chairman; Chris Corry, senior director of international operations; and Jaime Cuellar, USGC consultant in Colombia. The group will be moving on to Chile and Peru this weekend and will return to the United States on March 30.
Hands-on training on corn grading and in-depth information on export inspections were provided to buyers and end-users in Seoul, Korea last week through two Council workshops. Held in collaboration with the U.S. Agricultural Trade Office/Seoul, the Grain Inspection, Packers and Stockyards Administration (GIPSA) Federal Grain Inspection Service (FGIS) and the Korea Feed Association, the workshops featured Sandra Metheny, agricultural marketing specialist with GIPSA/FGIS. In the corn grading seminar, attended by 10 technicians, participants took part in every step of the process from cutting down an original sample to testing the weight per bushel to seeing how the grade determination is made when comparing results to the U.S. Corn Grade Requirement Chart. Next some 30 participants took part in a two-hour export inspection seminar that focused on all aspects for the process from governing statutes to monitoring grain movements to filing samples. “The primary objective of these workshops was to provide local buyers who previously had no official training with the opportunity to receive formal instruction and improve their ability to interpret grading factors,” said Byong Ryol Min, USGC director in Seoul. “The ultimate purpose, of course, is to reduce the chances of quality disputes by communicating efficiently and interpreting the factors authentically.” The workshops came as a result of questions regarding U.S. corn quality in Korea in 2006. These concerns were put to rest when the Council brought in an FGIS grain marketing specialist from Hong Kong to show lab personnel how testing and grading was completed.
Using a feed formulation program coupled with the current price of distiller’s dried grains with solubles (DDGS), the Council showed a number of Vietnamese feed millers and grain buyers that using U.S. DDGS can reduce their feed costs. These workshops, held in Hanoi and Ho Chi Min City in February, brought together some 40 participants from at least 20 different medium- and larger-sized feed mills in each location. In the exercise, Brill feed formulation software was used to introduce U.S. DDGS into the feed millers’ feed rations. “With existing ingredients in Vietnam and the current price of DDGS, our feed formulations demonstrated that DDGS can reduce cost of feed for swine and aquaculture,” explained Kim Rameker, USGC’s regional director for Southeast Asia. “These workshops have proven to be a useful avenue to promote DDGS use in animal feed.” The workshop was also supported by Dr. Bob Swick, technical director in Singapore for American Soybean Association – International Marketing. U.S. DDGS exports to Southeast Asia increased from 96,100 metric tons in 2004/05 to 170,400 tons in 2005/06. In 2004, Vietnam imported only 633 tons compared to their 14,488 tons of DDGS imports in 2006.