There’s a bid for 240 tonnes of barley at the spot price of $99 per tonne, f.o.b. Grande Prairie, Alta.
Another buyer wants 500 tonnes delivered to Calgary during September or October at $124 per tonne.
A third buyer offers to pay $24 under the October barley futures for 200 tonnes, f.o.b. Red Deer, Alta.
These were a smattering of the “live” bids on May 7 on an electronic grain exchange based in Calgary.
After a successful pilot run last summer, Agralink Exchange Ltd. has been cleared by provincial securities commissions and has been in operation since February.
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Buyers and sellers connect on the internet-based exchange, schedule and book their loads on-screen, record their pick-up and unload weights, and electronically make and receive payments.
Agralink is the cyberspace middleman, carefully screening market participants and acting as the clearinghouse for trades.
In April, 3,000 tonnes of grain were traded through Agralink, most of it barley.
Trading down
Sheldon Fulton, the company’s chief executive officer, said volume has slipped from the pilot project, but chalks it up to the season.
“There isn’t a lot of trade activity in the spring, so it gives you a chance to work the kinks out,” he said.
So far, 24 buyers and sellers have posted security to trade on Agralink, including feedlots and major grain and feed companies.
Three Agralink salespeople are talking to feedlots, inland terminals, marketing agents, grain companies and farmers to get the customer count up to 50 by the new crop year, which starts in August.
Fulton expects most farmers will buy into a live quotes service for $35 per month, where they can look at the orders on screen to get an idea of cash prices for grain in various regions.
The quotes service also includes Pro Market Wire, a daily markets commentary by analyst Errol Anderson.
Farmers can trade through the system indirectly through a broker, or post security and trade directly, Fulton explained.
One farmer from Eckville, Alta. has sold six truckloads of grain on the system since March.
“He sees it as an opportunity to get direct access to the feedlot group,” he said.
“The part he likes about it is that we require all the feedlot guys to post security, so he knows when he sells to us, he’s going to get paid.”
The farmer also had to post a $10,000 letter of credit to ensure his performance, noted Fulton.
On top of posted bonds, Agralink has a $3 million reserve fund put up by investors and its lenders, administered by an independent trust company, to ensure participants are protected from defaults.
Since February, most trading has been in barley, with some spot bids for feed wheat. But the exchange is also set up to trade milling oats and feed peas.
This summer, the exchange hopes to be trading hulless barley, feed oats and canola.
Fulton said it also wants to try trading freight.
Right now, bids and offers are posted either f.o.b., meaning the buyer is responsible for freight, or delivered, meaning the seller arranges it.
