Basis a click away

27 Jan, 2014 01:00 AM
OZbasisCalc allows growers to check Australian basis, real time, at the click of a button

IT’S FAIR to say that AgFarm account manager Fabian Devereux is passionate about the grains industry.

By day, he works with grain brokering and marketing business AgFarm in Bendigo, but he does not switch off once he has clocked off.

Instead, Mr Devereux has recently released his first foray into the world of app development, an app called OZbasisCalc, that allows growers to check Australian basis, real time, at the click of a button.

The basis is the difference between Australian prices and international futures, and is a critical factor in determining marketing strategies for Australian growers.

For instance, at present a strong domestic basis, created by solid demand from the lot feeding sector in northern NSW and southern Queensland means NSW and Queensland cereal prices are well above international parity. This basis is less strong in other states, but is still well above neutral territory.

Mr Devereux said the app was a natural fit between his day job and his hobby.

“I’ve wanted to enter the app market as a hobby for some time, and I’ve finally got my first idea off the ground after a few attempts," he said.

“This app is closely related to my day job as account manager for AgFarm who are grain brokers and have managed marketing programs Agfarm Advantage.

“OZbasisCalc is a tool that tells the grower what our basis is in the market on wheat on any given day in US cents a Bushel or US dollars per tonne.

“All the growers need to do is enter the APW1 port number, Chicago bushel price and lastly the foreign exchange rate in AUD vs USD terms .

“Within the app there is a search link for currency and also Chicago price.”

Mr Devereux said the simple app gave growers access to a tried and true method used by the trade for many years.

“This is a formula that grain traders and marketers have been using for a long time, in Excel spread sheets, but now growers can access this information on the run in just a minute, which could help with their marketing decisions," he said.

He said he had been toying with the idea for a couple of years, before taking around six months to get it developed.

“The development process was actually a bit quicker than I thought, the tech guys were fantastic to work with.”

OZbasisCalc is available on Apple app store and also Google play for Android.

Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
Date: Newest first | Oldest first


Rob Moore
27/01/2014 8:26:56 AM

Of course if the AUDA adopts my PPP Bill- all this will be available at a click for ALL offers across this country anyhow! Nevermind about converting to US$ and basis from Chicago or EU . We produce and live here- IF they want our grain THEY will have to LIST their offers in our currency either at farmgate or in storage . Pretty simple idea surely- no sneaking around playing games- TRANSPARENCY and EQUAL ACCESS will make the competition to give us all a living price!
30/01/2014 7:33:34 AM

Grow up Rob! There is nothing more transparent than basis. If you can't grasp what basis is, then that is your problem, not everyone elses. The reality is the basis is the most effective tool for guaging world demand for our wheat, canola or barley. Our strong basis this year says that someone is short and prepared to pay up for our grain well above Chicago levels. That is a wonderful transparent glimpst into real world demand, not the fairy tales being told by the USDA over in Chicago.
Rob Moore
30/01/2014 8:19:01 AM

We grow the product. The traders need our product. All offers must be submitted to the AUDA board- Listing site - GRAINS. Quantity, Specs,Price, Delivery point and an offer expiry date.So simple- just lock in with your National Grower number after you consider all the angles ie freight, storage costs etc. All the talk and spin to confuse the farmgate price now will be reflected in the offer board -all in Aust $.. Mult nations to local Traders will all have an even chance to secure grain in a transparent and fair way ie first in- best dressed.No "basis" needed or "bs" for that matter!
30/01/2014 9:23:23 AM

Sounds a fair argument Rob. After all we don't have to trade basis in the millions of other products we buy and sell here. So why all this crap for grain?
Rob Moore
30/01/2014 11:18:20 AM

The AUDA single desk Listing site is a bit like the turnstiles that all go through and the vision and records of these offers become historic records once an offer fills or expires. It would be imposible to get a more dynamic open system and give all sides total control of their positions. Make a change from the mushroom routine that we get now!
leon tanner
30/01/2014 2:04:46 PM

Rob Moore, sounds like he cares about his fellow farmers and our grain industry future a lot more than the selfishness and self congratulating likes of Deregul8. I say give Rob a fair hearing. Any jerk can tear down a wall but it takes a lot more to build one.
1/02/2014 7:36:55 AM

D8, faithfully following basis in Australia is not the transparent friend you think it is. Australia is too far away from where the majority of the world's grain is located and priced. Which basis are you following? North America, Northern Europe, Black Sea, Northern Africa.....?? Let's test your theory. Local 'basis' is strong but Australia is losing market share in traditional markets. Your 'real world' is pricing grain much lower and buying from other origins. Why do we link Australian grain to Chicago so much? Too much water in between. Our local futures market needs more support.
5/02/2014 7:27:35 AM

Good luck with that one. The water didn't affect the $100/t basis I booked on Friday for 600t of on farm stored GM canola over Winnipeg futures. Don't know about you but my banker deals in dollar not theory.
5/02/2014 8:03:24 AM

Thanks D8. If you are happy with the basis number you have locked-in on any given day by selling your physical grain, then absolutely no problems with that. What I responded to previously was your proposition that basis was the most effective tool for calculating value and market performance in Australia. Being happy with the price you got, is different to analysing if you should have accepted that price.
5/02/2014 8:15:18 AM

deregul8, I knew a guy who used to go fishing a lot. I heard from him every time he caught a big one. That was once or twice a year, and he fished 4 or 5 times a week. His brother was a big punter on the horses. He bet 4 or 5 times a week. I heard from him 3 or 4 times a year about his big wins. Both of them never got their mortgages paid off after 40 years.
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