LAST week we announced a collaboration between Clear Grain Exchange (CGX) and Grain Market to help provide better transparency on grain prices to growers.
CGX is providing real-time market data from our electronic exchange to the Grain Market portal via an integration.
Firm bids and recent trades on CGX will now be displayed in their price discovery platform to help ensure Grain Market users are aware of where markets are trading.
The need for this is because often grain is being bid or trading at different values to those advertised.
The image (above right) from Grain Market last week highlighting the benefits to growers and their advisors of the integration.
H2 wheat traded on CGX at $375 per tonne in Kwinana and there was a "firm" bid of $371/t (firm meaning a grower could match that bid and sell for $371/t, no negotiation required).
The best public bid on the day was $355/t, but there were buyers willing to pay up to $375/t earlier in the day and $371/t at the time the screen shot was taken (last Friday, June 12).
We want to ensure growers are getting full value for their grain! Both CGX and Grain Market are very much aligned on this objective.
Hence the investment made by both businesses to make this happen.
Now we understand the purpose of the collaborative announcement, but how is the extra value in grain generated?
By growers offering their grain at their price on an independent exchange, it becomes visible to all buyers and makes it easier for them to purchase.
This helps encourage more buyers to try and buy grain direct from growers.
The more buyers we have participating in buying grain from growers, the more confidence we can have growers are receiving what their grain is worth.
So far this season CGX has traded 500,000t of grain in Western Australia and 34 different buyers have purchased that grain from WA grain growers.
We are confident there are more buyers that want to buy Western Australian grain.
More than 200 buyers are registered with CGX, we just need to make it easier for them to purchase that grain from growers.
That is what CGX aims to do, whilst also ensuring growers are protected by anonymity and a secure settlement process where-by they do not lose title of their grain until they are paid.
We are supportive of independent price discovery services that try and help growers determine what their grain is worth and will continue to openly try and work with them.
The recent announcement with Grain Market complements CGX's long standing collaboration and integration with Australia's national independent price discovery service Profarmer.
CGX had integrated our market data with the DailyGrain price discovery portal, however this arrangement was ended by DailyGrain about three years ago.
Creating a more efficient Australian grain market is fundamentally what drives the team at CGX.
By increasing participation in the exchange it helps sellers find buyers and buyers find sellers, which generates value to all industry stakeholders.
Visit cleargrain.com.au to view recent trades on the exchange or phone 1800 000 410.