Elders is overhauling its grain marketing operations after taking a 20 per cent stake in online trading platform, Clear Grain Exchange (CGX).
The new look Elders Grain business will utilise the agribusiness’ 440-plus branches around Australia to make it easier for both growers and traders to buy and sell grain in Australia.
Previously Elders focused on accumulating grain on behalf of buyers, but the farm services and marketing player has now evolved its model to act as an impartial party to grain transactions.
It will combine existing trading technology with CGX’s electronic marketing platform and settlement services to offer clients “a more complete offering when they look to sell grain”.
Our model aims to leverage the Elders network to drive more liquidity in the Australian grain market and help establish true value for grain.
The new Elders Grain model begins operating, utilising Clear’s trading engine and settlement services, from today.
However, Clear maintains the “minority investment by Elders” will not compromise any dealings between the parties and CGX remains an independent market operator “at arms-length” from the agribusiness.
Sound CGX track record
CGX traded more than 1.2 million tonnes last season and averaged $4.40/t above the best public bid according to data from independent analyst, Profarmer.
Elders national grain manager, Lachlan Allen, said the upgraded grain model was positive for growers, buyers and the grain industry.
“Our model aims to leverage the Elders network to drive more liquidity in the Australian grain market and help establish true value for grain,” he said.
“Growers can simply call 1300 ELDERS and our team can provide all current bids for grain.”
Alternatively, if growers had a sell price in mind and current bids were not at that level, the company would act on producers’ behalf using CGX to help them set their price and let all buyers bid on their grain.
Mr Allen said client feedback and market research had prompted the company to change.
“Evidence indicates growers can often be overwhelmed by searching for grain prices and results in grain trading at different values in near-by locations for the same grade,” he said.
“Elders Grain now has the benefit of achieving true price discovery by facilitating grain transactions in a single marketplace.
“Our aim is to make the process of buying and selling grain in Australia much easier and more efficient.”
Operations of the exchange and service to our customers continue to be completely independent and confidential at all times.
CGX’s owner and managing director, Nathan Cattle, believed the Elders network would help educate growers and other parties on the benefits of the exchange and generate extra volume on the electronic platform.
“That’s good for growers, traders and all other grain marketing professionals,” he said.
“CGX’s vision is to be an industry utility providing transaction services and improving market forces for Australian grain.”
Importantly, he said all dealings between Elders and CGX parties remained at arms-length.
“Operations of the exchange and service to our customers continue to be completely independent and confidential at all times.”
“Both parties are committed to long-term value creation at the farm-gate.
“We will achieve this by working with all parties in the industry to improve price discovery and make it easier for all buyers to purchase growers’ grain whilst ensuring they are protected at all times.”
Elders’ agency business general manager, David Adamson, said buying into CGX at the same time as making changes to the operating model fitted with the company’s core business of being an independent agent creating value at the farm-gate.
“CGX is an important piece of industry infrastructure and our investment in the platform, along with the other changes to our model, will provide clients more options when it comes to selling their grain.
“CGX’s technology and the value it creates is proven, unrivaled and well aligned with Elders’ service offering to growers.”