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Grain Terminology  

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Basis The difference between a spot or "cash" price and a specified futures price.
Bid Willingness to buy at a stated price according to specified conditions.
Broker A person paid a fee or commission for acting as an agent in making purchase or sales.
Buyer's Market An abundance of goods available, permitting buyers to be selective and to buy at a lower price than had previously prevailed.
CCC The Commodity Credit Corporation, a wholly Government owned corporation established in l933 to assist American agriculture.
CFTC The Commodity Futures Trading Commission, a regulatory agency set up to supervise futures trading on commodity exchanges.
CIF Deleted periods between letters Cost, insurance, and freight.
Carrying Charges Those costs incurred in warehousing the physical commodity, generally including interest, insurance, and storage. May include allowance for loss in quality, condition, or volume.
Cash Price Term used to represent the economic value or worth of a commodity. Often used to distinguish all other prices from futures trading on an organized commodity futures market.
Close (cash) At some cash grain trading centers, a time to end cash grain trading is established by the exchange members. However, the market reporter should use discretion in determining when fair and open trading has ceased.
Close (futures) Period at the end of the futures market trading session during which all trade is declared as having been executed at or during the last seconds of trading.
Commission Merchant Person who makes a trade in his own name and becomes liable as principal between himself and the other party to the trade.
Consignment A shipment sent to a commission merchant for him to sell.
Contract Price Price and conditions of sale agreed upon when buyer and seller negotiate a transaction.
Country Elevator Grain elevator located in a local farming community to which farmers bring their grain for sale or storage.
Crop Year (U.S.) Period from one harvest of a crop to the next harvest in the following year. The period varies among commodities as follows.
Deferred Delivery (See forward contracting.)
Demurrage The penalty assessed against a shipper or receiver for failure to utilize or release a railroad car, barge, or ship within a specified period of time.
Discount A schedule of deductions from the cash price for a commodity grading lower than the base grade.

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Export Elevator An elevator usually located on deep water and able to load export orders into ships.
Ex-Spout Loaded into ship from discharge end of spout pertains to bulk commodities.
FAS/fas Deleted periods between letters Free alongside ship, does not include loading charges.
FOB Deleted periods between letters Free on board, price at place or origin not including transportation charges.
Foreign Material (FM)- Dockage Anything other than the designated commodity which is present in a lot.
Forward Contracting A transaction common in many industries, including commodity merchandising, in which the buyer and seller agree upon delivery of a specified quality and quantity of goods at a specified future date and price or formula for establishing the price.
Forward Price Price of a commodity bought or sold for a specified delivery period usually 30 days or more away.
Free Supply Quantity of a commodity available for commercial sale; does not include Government held stocks. Also, may exclude stocks held by processors for their own use.
Futures Contract Agreement to buy and receive or to sell and deliver a commodity at a future date under conditions specified by the trading rules of the particular Board of Trade or Exchange.
Handling Charges Charges for loading and unloading a commodity.
Hedging Purchase or sale of futures against the purchase or sale of the physical commodity as protection against price changes.
In-transit Billing Privilege of utilizing a portion of paid in rail freight upon continuance of transit, usually in the same general direction.
Inspection Certificate Certificate showing grade and other factors of quality issued by inspector licensed under the U.S. Grain Standards Act, or a certificate issued on agricultural commodities under the Agricultural Marketing Act of l946.
Margin (futures) Amount deposited by buyers and sellers of futures to insure performance on contract commitments; serves as a performance bond rather than a down payment.
Nominal A nominal price quotation is reported in the absence of a cash trade if the reporter is confident that the nominal price reflects current market value conditions.

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Offer Indication of willingness to sell at a given price, same as "ask."
Open-End Contract A contract to purchase with a minimum cash payment, with final settlement at the end of the season.
Organic Refers to product that has been grown organically, according to the Organic Foods Production Act (OFPA) of 1990. For more information on the organic 
Parity A theoretically equal relationship between commodity prices and all other prices; in farm program legislation, parity is defined in such a manner that the purchasing power of a unit of the commodity is maintained at the level prevailing during an earlier historical base period.
pds Deleted periods between letters Price date of shipment, price of a contracted commodity to be determined on date of shipment.
Ports of Export Sites for collecting and loading commodities for export.
Premium A schedule of allowances over the cash price for a commodity grading higher than the base grade.
Price Protection Price discount subtracted from the bid; usually in effect during volatile market activity. During times when price protection occurs, bids should include the protection discounts, and a statement should be included in the report reflecting the range of protection discounts taken for each commodity.
Reseller (Jobber) A person who takes ownership of a commodity and then resells on the open market before physically taking delivery of that commodity.
Seller's Market Market condition in which there is a scarcity of goods available, enabling sellers to obtain better conditions of sale or higher prices.
Spot Bid Price willing to be paid for a commodity available for immediate delivery.
Spot Price Price of a commodity available for immediate delivery.
Sub-terminal Takes delivery of grain from both growers and country elevators for storage and distribution. Usually has greater handling facilities than a country elevator.

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Tender Delivery against a futures position. In export trade a request by a foreign country for offers to sell them grain.
Terminal An elevator located at a major point of accumulation and distribution in the movement of commodities. Usually has greater handling facilities than sub-terminal.
To-Arrive Price Price of a commodity, including freight and handling charges, delivered destination at a specified time.
Track Country Station Usually involves a price designation; indicates the cost of a given commodity loaded in rail car and ready for shipment from an interior location.
Warehouse Receipt Ownership certificate for a specific commodity and grade of a commodity stored in a licensed warehouse, elevator, or storage tank.


  Last Modified Date: 01/04/2011