Last week, a team of corn starch end-users from Mexico traveled to the U.S. to learn more about contracting using basis and futures to set prices and better understand the market. Along with the U.S. Grains Council (USGC), Kansas Corn Commission and Missouri Corn Merchandising Council co-hosted the team.
Due to rotations in companies and limited knowledge of how futures markets in the U.S. work, the variables that affect them and the tools used to develop a more secure way to contract grain, the Council offered to work with a group of executives from Mexican industrial corn processors so they could better understand market dynamics.
“These major Mexican industrial corn processing companies were caught by surprise with last year’s volatile market. With many requests for more information from the companies, we proposed a risk management seminar,” said Javier Chavez, USGC marketing specialist in Mexico.
The group began its time in Missouri with a course at StoneX, covering a variety of topics including the basics of hedging, the futures market, a corn market review and price forecasts. The group met with Ingredion the next day, and then visited the Nunemaker-Ross farm in Kansas to see the corn crop in person. During the farm visit, the group had the opportunity to meet with producers and discuss how biotechnology is used in U.S. operations. The team closed out their time with an update on sustainability from Carlos Suarez, USGC manager of sustainability, policy and innovation.
“Major international consumer goods companies are ever more concerned about ensuring that the inputs and ingredients that go into their products not only comply with internal sustainability standards, but also with consumer expectations. For the Council, being able to engage with key Mexican companies on how U.S. producers guarantee sustainable corn production is of great value to ensure that our products continue to be present and relevant across international supply chains,” Suarez said.
By welcoming this team to the U.S., the Council hopes the participants can return to their companies with a better understanding of the corn market and further develop their relationships with industrial corn producers.
“This was a great opportunity to work with a new industry and help us develop future programs on barley and sorghum in food, and to promote our sustainability program, which these companies are very committed to with their own organizations,” Chavez said.
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.