FarmLead Help Guide

Posting
  • FarmLead offers Sellers access to a large pool of buyers, a 24-7 marketplace, and reduced brokerage fees. Posting grain on FarmLead is like making hundreds of phone calls at once. Available online 24 hours a day, FarmLead offers you the flexibility to sell your grain when you are free to think about it.
  • FarmLead offers Buyers access to a large pool of sellers and an easy way to view and negotiate on offers.
  • The Online Marketplace notifies both Sellers and Buyers when an offer is made. A notification will let you know when to log back into the Marketplace to check your deals.
  • You can delete your offer if you have no on-going negotiations or conversations associated with the offer.
  • To delete an offer with existing negotiations or conversations, first end all the negotiations associated with that offer. Then, delete your offer.
  • FarmLead is an anonymous Marketplace.
  • No personal information about your or your business is disclosed when you post an offer.
  • Only when both the seller and the buyer agree to the terms of the deal is information about each party disclosed.
  • When negotiating a deal on FarmLead, you will not know who you are dealing with until both the buyer and seller agree to the terms and conditions of the sale.
  • Your FarmLead profile is 100% customizable. If there are companies or farmers that you do not wish to enter into negotiations with, please contact FarmLead directly. We can alter your profile to ensure your preferences are respected.

When posting an Offer on FarmLead, you can select the crop year from a list of options.

  • Sellers can indicate they are looking for an Act of God clause in the comments section when posting a New Offer on FarmLead.
  • FarmLead does not offer an Act of God clause on your behalf.
  • The FarmLead Marketplace is optimized for the sale of all grains.
  • To post your Organic grain, post a New Offer on the Marketplace and use the Organic or Equivalent option to indicate that your crop is Organic, non-GMO or Chemical Free.
  • When posting an offer on FarmLead, you set your own price.
  • Buyers will negotiate with you on price. You don’t need to set a target.
  • FarmLead recommends setting prices within 5%-8% of local cash prices. Prices outside this range deter buyers from negotiating with you.

You decide how far you are willing to ship your grain. This can be a key component of your negotiation.

Negotiating

You can negotiate on all aspects of your grain deal including quantity, price, transportation and payment terms.

  • The FarmLead Marketplace was designed to allow users to ask questions before starting negotiations.
  • Simply click the ‘Ask a question’ button in the offer and make your inquiry.
  • Once you’ve asked your question you are under no obligation to buy the grain.

To review all your actions on FarmLead:

  • Login to your account and click “My Grain Deals”
  • Navigate to your offer under “Awaiting Your Response”.
  • Tap the offer and follow the arrows to the next page. There should a few rows to select from on the next page. Each row represents a different negotiation (i.e. Buyer 1, Buyer 2).
  • Tap a negotiation to review their comments/counteroffer.
  • Make a comment back using the chat function (“Ask a Question/Comment”); or click the “Counter” button to change the price and other deal terms.
  • Login to your account and click “My Grain Deals”.
  • Navigate to the offer under “Awaiting Your Response”.
  • Click on the deal and view the details on the right side of the page.
  • Click the “Counteroffer…” button in the far right column. A 4th column should open and display price, freight terms and movement period. Make your changes here.
  • Once you’ve made all your changes to the counteroffer, click the “Submit” button in the top right of the page. Your counterparty will immediately receive the counteroffer.
  • The deal will be moved to the “Awaiting Counterparty Response” section of your “My Grain Deals”.
  • Login to the mobile app and click “My Grain Deals” on the bottom menu.
  • Tap the deal in the “Awaiting Your Response” section.
  • Then, tap on the “Counteroffer” button twice to make your changes to the deal. Change the price, freight terms and movement period here.
  • Once you’ve made all your changes to the counteroffer, click the “Submit” button in the top right of the page. Your counterparty will immediately receive the counteroffer.
  • The deal will be moved to the “Awaiting Counterparty Response” section of your “My Grain Deals”.
  • Login to your account and go to “My Grain Deals”.
  • Look for the deal in the “Awaiting Your Response” section.
  • Click on the deal and view the details on the right side of the page.
  • Click the “End Negotiation” button on the top right corner of the page.
  • Once you’ve ended the negotiation, click on your offer in “My Grain Deals” on the top right of the offer page.
  • Locate the menu bar (3 lines); click the menu to end the negotiation.
  • Login to the mobile app and click “My Grain Deals” on the bottom menu.
  • Click the “End Negotiation” button.
  • Once you’ve ended the negotiation, you can edit your offer (Including price) by clicking on the My Grain Deals and clicking “Edit”.
  • You can edit your offer, including uploading photos or specs, as long as there are no counteroffers or negotiations in progress.
  • When negotiating on an offer that someone else posted, you can upload photos or specs each time you make a counteroffer.
  • Your user rating will not drop if you reject a deal.
  • Your user rating will drop only if you do not respond to an offer before the time limit expires.
Watchlists
  • FarmLead Watchlists allow Sellers to keep up-to-date on what buyers are looking for and allow Buyers to keep up-to-date on the what producers are posting.
  • A Watchlist can be set to search for grain in specific areas, for specific grades, and specific min / max prices.
  • Watchlists can send a SMS or email message when new items become available, or they can list matching items within the marketplace.
  • You can change your Watchlist settings so you only receive the email/SMS notifications you want.
  • Notifications are easily turned on and off using the edit function of any watchlist.
  • Login to your account and navigate to My Watchlists.
  • Click on the specific alert you want to edit on the left-hand panel.
  • Once the panel on the right loads with details of that specific Watchlist, there’s a link on the top right to “Edit Watchlist”.
  • A new screen will pop up where you can change all the parameters and/or turn off notifications via the checkbox at the top.
  • Click Save.
  • Login to the mobile app and click the Search icon (magnifying glass icon) on bottom icon bar.
  • Click on “My Watchlist” at the top of the new screen.
  • Click on the Watchlist alert that you want to edit and once it loads, click on “Edit Watchlist” at the top right.
  • A new screen will load where you can change all the parameters and/or turn off notifications by toggling the box at the top.
  • Click Save.
  • If you no longer want to search for a specific type of offer and/or receive alerts, you can delete the offer.
  • You can re-create the Watchlist should you want to search for that grain in the future. want to re-instate Watchlist notifications, you will have to re-create a new Watchlist:
    • Login to your account and navigate to My Watchlists.
    • Click on the specific alert you want to edit on the left-hand panel.
    • Once the panel on the right loads with details of that specific Watchlist, there’s a link on the top right to “Delete Watchlist”.
    • Click Save.
  • If you set up a Watchlist, you may have activated notifications – meaning a SMS or an email is sent when grain offers matching your Watchlist are posted on the marketplace.
  • If you set a Watchlist but you are not currently in the market for that type of grain, we recommend turning off notifications until you are in the market for the corresponding grain.
  • If you set up a Watchlist, you may receive a SMS or email when grain offers matching your Watchlist are posted on the marketplace.
  • Watchlist notifications do not indicate that you’ve posted an offer or made a counteroffer. They indicate that new offers are active on the Marketplace.
Payment
  • Buyers make payment directly to the farmer.
  • Buyers will offer an EFT (wire transfers) or a certified cheque.
  • FarmLead does not participate in the monetary exchange.
  • All of the buyers registered on FarmLead are monitored by Dun & Bradstreet, a company who provides reports on credit history. This real-time view on credit risk has ensured every farmer who has conducted a transaction has been paid.
  • Some buyers also choose to display their Bonded status in their Buy Offers. Check for the field called ‘Bonded Buyer’ for more information on every Buy Offer.
  • FarmLead enables Buyers to pay for deals through the Marketplace.
  • Once the terms of a deal are agreed upon, both parties are billed for the connection fee and a grain contract is generated directly between the Buyer and the Seller.
  • FarmLead does not participate in the monetary exchange.
  • Since 2013, all Sellers closing deals on the FarmLead Marketplace have been paid in full.
  • Optional credit insurance to cover buyer payment risk is available to Sellers upon closing a deal. This insurance is available via the SecureSellAg insurance program.
  • Both the Buyer and the Seller pay FarmLead $1/MT for the first 80 MT and $0.25/MT for every MT thereafter.
  • For a 100 MT sale, FarmLead collects $85 from the Buyer and $85 from the Seller.
User Rating
  • Seller ratings start at 8.9 and can be increased by adding photos or grain spec sheets.
  • Buyer ratings are subject to 10 factors drawn from a Dun & Bradstreet report (updated every 3 calendar months), as well as whether or not they’re a bonded company.

Both buyer and seller ratings decline if the parties:

  1. Do not respond to actual counteroffers before the time limit expires (This does not include chats of comments)
  2. Back out of a deal without cause after the deal was closed.

Buyer and seller ratings increase if the parties successfully complete deals on the FarmLead Marketplace.

FarmLead strives to make the user rating system as robust as possible, including the ability to give feedback on trading partners.

Grain Tests
  • If the grain sample doesn’t meet grade, the transaction will not be completed.
  • If you wish to repost the offer with the new information, remember to provide all additional information about the grain in the comments section.
  • FarmLead recommends that all grain be tested prior to sale. A grain test ensures you understand the quality and content of your grain prior to posting it for sale.

FarmLead recommends third party grain tests via SGS Canada.

Basis

The new feature benefits grain buyers by enabling them to set a cash price by adjusting their basis against a commodity’s futures price. Buyers no longer have to worry about the impact of their cash bid being ‘out of the market’ when the futures markets move up or down. By setting their basis on the FarmLead platform, their cash price will update automatically as grain futures values change. Further, buyers can decide between doing a cash contract or a basis contract with grain sellers.

Sellers benefit from the increased price transparency and knowledge of changes in the cash and basis markets. Giving both the basis and cash contract options, along with current option to negotiate different delivery periods will help farmers optimize their grain marketing plan.

Cash deals are transactions made for cash in local markets in the present day. These deals do not involve locking in basis or futures value at a later date. You can make them today and a cash price is finalized and cannot change at a later date.

Basis is difference between the price of a commodity at the local cash market and the price of the same commodity on the futures market. It is traditionally viewed as a key indicator of local supply-demand factors for various commodities. If a basis contract is agreed to by a grain seller and grain buyer, the seller must lock in a futures value before the expected delivery period (unless other arrangements are made).

Basis reflects local market prices and conditions. The primary difference between the local cash price and the futures market price is the cost of other factors to bring a commodity for delivery. These factors include (and are not limited to) transportation costs, supply and demand conditions, interest costs, and storage costs. A basis exists for every delivery month of a futures contract. Basis trades are profitable when the gap between the cash market and the futures market narrows. One can use basis to determine the best time to buy or sell a commodity.

The factors impacting the cash and futures markets will influence a basis. When we discuss changes to a basis price, we describe them as either strengthening or weakening. When basis becomes more positive, we say that the basis is strengthening. When basis goes in the opposite direction or becomes more negative, we say that it is weakening.

We witness a stronger basis when cash prices increase relative to the to the futures price. We see a weaker basis when the cash prices decreases compared to the futures price.

Cash implied is the value created when adding the futures price and basis together. For example, if the value of a futures contract is $4.00 per bushel, and basis is -$0.30, then the cash implied is $3.70 per bushel.

Buying with Basis Contracts

Posting a basis offer is similar to cash deals with a few simple tweaks to the process.

The following is a 10-step guide to listing a basis deal as a buyer.

  1. Sign into Farmlead.com and select “Post New Offer” at the top of the page.
  2. Select your grain type. If you select a grain that does not have a futures market associated with it (i.e. malt barley), then you cannot post a basis deal. Only canola, corn, oats, soybeans, and wheat can support basis contracts on FarmLead
  3. Select your contract type. You have two options: A cash contractor or a basis contract. If you want to select a basis deal, you will need to select this contract type.
  4. Determine the grade, crop year, characteristics and moisture levels you are seeking.
  5. Scroll down to determine your freight and delivery options, including the movement year, delivery points and period you are seeking to receive your grain.

The next section is the most important for basis contracts.

  1. If the user has selected a Canadian delivery location, they’ll have the option of choosing a basis type: either Default or Currency. A default basis is used when you take the absolute value of the futures value. A currency basis is used when you multiply the futures market value by the exchange rate between the country the futures market is in and that of which you’re dealing grain in.
  2. Select the futures contract on which you are setting your basis against local cash prices. The field will automatically provide the latest futures price from our data feeds in Chicago, Kansas City, Minneapolis, or Winnipeg, Canada (depending on the commodity).
  3. In the next field, you will enter your basis. This can be a positive or negative number.
  4. You will enter the quantity of grain you seek to purchase. After you enter your basis, the fields below will automatically calculate the implied cash price and the value of the grains you are seeking to purchase.
  5. Finally, select your payment terms. You have a series of options, including “Payment Upon Delivery” or within a series of days.
Trading on FarmLead Platform

Given that corn, wheat, and soybean futures markets in Chicago, Kansas City, and Minneapolis are priced in U.S. dollars, all American-based deals use a default basis to set a cash price.

If the local cash price is $4.00 per bushel, and the December futures price is $4.40, then the basis is +$0.40 for December or “40 over”.

CAD is the trading symbol for the Canadian Dollar. If you sell/buy grain in a country other than where the futures market is located, a local cash price can be set through Default or, if applicable, a Currency basis. A cash grain price is set by converting the futures price into the currency of your country and then adding a basis to it.

As corn, oats, wheat, and soybeans futures market are based in USD, to get a cash price in CAD, a buyer can use a default basis or currency basis equation.

For example, the USD-CAD exchange rate is 1.25 ($1 USD = $1.25 CAD), and if the U.S. futures market is $5.00 / bushel, and the local cash price is $6.00 / bushel, then a currency basis is -$0.25 / bushel,

$5 (USD futures) x 1.25 (exchange rate) = $6.25 (FX-converted futures value)

$6.00 (local cash price) – $6.25 (FX-converted futures value) = -$0.25 (Currency basis value).

Conversely, if the basis set in default USD, then we take the absolute value (5.00) and add to / subtract it from the local cash price to get a currency/default CAD basis of +$1.00 / bushel.

$6.00 (local cash price) – $5.00 (absolute value of futures) = +$1.00 (Default basis).

Costs of Using FarmLead

Buyers and sellers do not pay any fee to register an account, post their offers and negotiate with other parties. Only when a deal has closed do participants pay a connection fee. These connection fees are considerably lower than traditional costs of grain trade in the North American markets. On an average deal, a user will pay less than a cent / bushel.

The Connection Fee is payable immediately after the deal is finalized and before the grain ships.

FarmLead receives price data from three sources depending on the commodity.

  • Corn, Soybean, Milling Oats, Soft Red Winter Wheat and Hard Red Winter Wheat futures prices are provided by the Chicago Mercantile Exchange (CME). The market data is the property of the CME. All rights reserved.
  • Hard Red Spring Wheat features provided by the Minneapolis Grain Exchange (MGEX). The market data is the property of the MGEX. All rights reserved.
  • Canola futures are provided by the Intercontinental Exchange (ICE). The market data is the property of the ICE. All rights reserved.

Founded in 1848, the Chicago Board of Trade was founded to provide buyers and sellers of commodities with a central location to negotiate contracts. After a series of mergers, CBOT was absorbed into the Chicago Mercantile, the largest future exchange in the world.  

For nearly 170 years, Chicago has been a central hub for futures, cash-settlement, and electronic trading. Its proximity to the Great Lakes, farmland and cattle country made it a natural hub for grain merchants, processors, and agriculture producers to trade contracts, hedge their positions, and reduce rise to large fluctuations in price changes.

Traders and farmers looking to learn more about base trading should consider visiting the Chicago Board of Trade’s website or downloading its free educational readings, right here.