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The Internet's first online cash grain exchange is up and running. A new method of purchasing grains could make life easier for feedlot managers. By utilizing the Internet, grain purchasers can save time, phone calls and money by purchasing their grain online. CyberCrop.com, the first online cash grain exchange, allows buyers to post bids online, and producers to accept or negotiate bids 24 hours a day. "We took a look at the marketplace, and there was no one doing business online the way the grain market really works," says Ron Wineinger, Vice President of Marketing for CyberCrop.com. "We developed a software that works the way the market works." In addition to the cash grain exchange, CyberCrop.com also offers current news, weather and market data, along with data analysis and commentary. 
" We've had interest from a variety of purchasers, including elevators, processors, feed mills and feedlots," Wineinger says. "Some entities from all segments in the cattle feeding industry have signed up to utilize the system." To use the system, CyberCrop.com sends an implementation team to the buyer's office, once he's signed a service agreement, to configure the computer and provide training. "Our im- plementation team can customize the web site for a customer without the need to purchase additional software." Next, buyers post a bid on a specific product, like No. 2 Yellow Corn for November delivery. Producers across the country can look at the bids, accept the price or negotiate with buyers. All bids are made on a delivered price basis, and there is a mapping tool to help determine transportation costs. The site is an independent, secure web site. Producers must enter two passwords before a contract is accepted. Additionally, buyers have a double-accept mechanism to prevent any accidental trades. Once both parties accept the contract, they receive a contract confirmation number on the legally binding agreement. "We don't mail the contracts. Both the buyer and the producer can print the contract off the Web site, or they can track their contract on the site through the confirmation number," he says. According to Wineinger, the site allows buyers to make more informed, profitable decisions because of the data provided on the Web site. Additionally, buyers can expand their market area, and buyers increase their productivity due to less time on the phone negotiating contracts and arranging deliveries. The site also reduces paperwork costs by handling everything electronically. The site guards against overbuying by allowing a buyer to set the maximum quantity he wants to purchase at a particular price. The system is available to buyers for a minimal transaction fee. The fee varies by commodity, but is about one cent per bushel. "The transaction fee is offset by the savings in efficiencies and the reductions in transaction costs," Wineinger says. The site trades corn, soybeans, wheat and grain. |
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