Asa Imports Guide


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Soya Importers Guide

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Asa Imports Guide

  1. 1. SOY IMPORTERS GUIDE Copyright ©2005 American Soybean Association International Marketing Southeast Asia All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the copyright owners. M04GX19403–092005–0500
  2. 2. soy importers guide
  3. 3. American Soybean Association (ASA) International Marketing is a non-profit, single commodity organization working towards the promotion of soybeans as a viable crop. Its objective is to develop the market for soybeans while ensuring the ongoing demand from food and feed processors for this valuable raw material. ASA also encourages the development and promotion of soy-based products. ASA’s members include farmers, soybean handlers, oilseed crushers, feed manufacturers, seed suppliers, fertilizer and agricultural chemical organizations, government officials and related agencies. ASA works with the US Department of Agriculture, Foreign Agriculture Service, United Soybean Board, and local groups and individuals involved in the utilization, consumption and marketing of soybeans and soybean products. 02 Headquartered in St Louis, Missouri, the organization’s international marketing program, aimed at keeping soybean production profitable, extends to 8 offices, spanning more than 77 countries worldwide. In addition to promoting the use of soybeans and soybean products, ASA fosters research, supports feeding trials, and serves as a resource to increase the technical knowledge and range of soy- based products available in the global market. For more information on soybeans and soybean products, contact: ASA International Marketing Southeast Asia 541 Orchard Road #11-03 Liat Towers Singapore 238881 Tel: (65) 6737 6233 Fax: (65) 6737 5849 Email:
  4. 4. Contents 04 History of the Soy Importers Program 09 Introduction to Soybeans 17 Quality Standards for US Soybeans and Soybean Products 25 Procuring Soybeans and Soybean Products 31 US Bulk Handling and Export System 35 Specialty / Identity Preserved Soybeans 39 Payment Options 03 45 Risk Management 51 Glossary 59 Useful Resources
  5. 5. History of the Soy Importers Program In 1997, the American Soybean Association (ASA) began a series of trade programs specifically aimed at educating importers in Southeast Asia on the benefits of importing US soybeans and soy products. The program series served to empower them with information on how to be more effective in a highly competitive domestic and global business environment, so as to synchronize their existing technical programs with the fundamentals of the trade as part of the buying equation. Hence, between 1997 and 1999, seminars that covered the commercial aspects of the trade were conducted in the region under the Soy Importers Workshop and 04 Risk Management Series. The program objectives were to: • provide an understanding of the crucial role the Chicago Board of Trade plays in affecting price movements, and how other market forces affect these fluctuations • present concepts and theories for managing commodity prices using futures and options • assist with the establishment of effective risk management to enable customers to have more direct control over their buying decision • educate customers on the effectiveness of the US commodity handling system and development of infrastructure from competing markets • analyze global market forces and conditions affecting the freight industry; and other forces affecting the production and demand for US soybeans and soybean meal • assist customers with the application of these tools to meet domestic needs To meet the challenges of the new decade such as the continued expansion of the South American soybean market, global consumer acceptance of agricultural biotechnology, and erratic international economies, ASA forged ahead with the development of a more advanced program series. The new program is designed
  6. 6. to equip customers with updated information and new technologies to ensure that they understand the intrinsic value of using quality ingredients, and are able to make sound decisions beyond price considerations to ensure profitability. To take this concept further and customize it to address specific needs within individual companies, ASA currently conducts workshops under its Preferred Customer Program. Through the in-house program, core decision makers of the company that include finance purchasing, logistics and nutrition managers are able to participate and benefit from this highly dynamic and hands-on computer based program facilitated by ASA's technical personnel and consultants. The aim is to demonstrate that no departmental decision should be made in isolation, as bottomline profits depend on a cohesive buying strategy involving all departments. 05 About the Soy Importers Guide The Soy Importers Guide serves as an easy reference tool to assist buyers and importers with the import of soybeans, soybean meal, soybean oil and other soy products from the United States. The information contained provides a general overview of US soybean production and processing, quality standards and inspection, procurement, payment options, risk assessment tools, and useful resources and web links. The Soy Importers Guide is produced under the direction of the American Soybean Association (ASA) International Marketing with funding from the United Soybean Board (USB). The United States is the world's premier producer and exporter of soybeans and ASA is proud to represent those interests from eight offices around the world. This handbook is just one of the many importer services which ASA offers consumers of US soybeans, and other soy products.
  7. 7. Introduction to Soybeans
  8. 8. Introduction to Soybeans Often referred to as the miracle crop, the soybean is the world’s leading provider of protein and oil. More soybeans are grown in the United States (US) than anywhere else in the world. In 2004, US soybean farmers in over 31 states harvested 74 million metric tons of soybeans. A 60-pound bushel of soybeans yields about 48 pounds of protein-rich meal and 11 pounds of oil. The primary use of whole soybeans and protein from soybean meal is to provide a low-cost, high protein feed ingredient for fish, poultry, swine, cattle, and other animals. Other uses range from tofu and soy sauce, to soy flour used in baked goods and high fiber breads. In addition, the protein is used in industrial products such as plastics, wood adhesives, and textile fibers. 09 Soybean oil is the leading vegetable oil in the world. Uses of soybean oil range from margarine to salad dressing and mayonnaise. Examples of industrial applications include the use of the oil as a carrier in inks and paints. Soybean oil also provides an environmentally friendly fuel for diesel engines. Soybean Planting, Harvesting and Distribution Planting The process begins in the field with the soybean seed planted in spring or early summer. Planting dates vary depending on the latitude and geographic region. Classification of soybean cultivars into maturity groups help US farmers choose correct varieties for their regions. Farmers may plant 6 to 10 different varieties of soybeans each growing season. Seeds develop in pods with each pod containing 1-5 seeds, but the most common varieties contain 2-3 seeds per pod. Harvesting Soybeans are considered dry mature when seed moisture reduces to less than 14% in the field. Harvesting date depends on the variety, growing regions, planting
  9. 9. date, and local weather conditions. The most active harvest periods are during the months of October and November. In the US, almost all soybeans are harvested by combines. The seeds are threshed out from pods into a hopper and moved into a transport truck. If moisture content is more than 14%, soybeans need to be dried. Once dried to the appropriate moisture content, seeds are transferred to storage facilities. Proper handling of the soybeans during harvest and storage is critical to protect the beans from damage. Distribution Soybeans are stored at farms, elevators, and processing plants in various types of storage facilities before being channeled to the next destination. Local elevators will store and condition the soybeans before selling and shipping to a soybean 10 processor or export elevator. Farmers may also transport soybeans by truck to a regional transport facility such as a railroad or river terminal for shipment directly to a grain buying station, processing plant, or harbor facility for shipment overseas. Once the soybeans are sold to local, national or international processors, they are refined into various products in many different countries. Soy processors convert soybeans into products made from whole soybeans, such as tofu, tempeh, miso, natto, soy sauce, some soy flours, soy nuts, and soymilk. Other soybeans destined for more traditional food and technical products are graded, cleaned, dried, and cracked to remove the hull. Soybean hulls are further processed for animal feed or fiber additives for breads, cereals, and snacks. Soybean Processing Whole Soybeans Whole soybeans are the edible seeds of the soybean plant. They are high in protein and contain beneficial phytochemicals, such as isoflavones. The mature soybean is about 38% protein, 30% carbohydrate, 18% oil, and 14% moisture, ash, and hull. Whole soybeans can be cooked and used in sauces, stews, and soups. Whole soybeans that have been soaked can be roasted for snacks.
  10. 10. Soybean Meal Soybean meal is a premium product because of its high digestibility, high energy content and consistency. Over 80% of the soybean meal produced in the US is dehulled and processed in large state-of-the-art solvent extraction facilities. High quality standards and an efficient production, handling and shipping industry in the US ensure that export customers receive a consistent and high value product. Properly processed dehulled soybean meal is an excellent source of protein and is used extensively in feed for swine, beef and dairy cattle, poultry, and aquaculture. Soybean meal is ideal for high-energy rations such as broiler, turkey, and pig starter feeds. For young animals and birds, dehulled soybean meal is the preferred product. Soybean Oil Soybean oil is the world’s most widely used edible oil. In the United States, it 11 accounts for nearly 80% of edible oil consumption. Soybean oil’s 85% unsaturated fat profile is among the lowest of the vegetable oils and contains 61% polyunsaturated fat and 24% monounsaturated fat. Almost all margarine and shortenings contain soybean oil. It also is frequently found in mayonnaise, salad dressings, frozen foods, imitation dairy and meat products and commercially baked goods. Soybean oil has little flavor, which is an advantage because it does not interfere with the taste of food. Soybean oil is also used commercially in the manufacture of glycerin, paints, soaps, rubber substitutes, plastics, printing ink, and other products. Soy Protein In 1999 the Food and Drug Administration (FDA) announced that foods containing soy protein may reduce the risk of coronary heart disease (CHD). Foods that meet the new FDA guidelines can now label their products with this claim. The soy health claim is based on the FDA’s determination that 25 grams of soy protein per day, as part of a diet low in saturated fat and cholesterol, may reduce the risk of heart disease by reducing blood cholesterol levels. Processed soybean protein products are divided into three categories based on protein content: soy flour, concentrates, and isolates. Soy flour is made from roasted
  11. 11. Tofu Tempeh soybeans ground into a fine powder and contains 50% protein. Soy flour is gluten- free, so yeast-raised breads made with soy flour are dense in texture. Soy grits are similar to soy flour except that the soybeans have been toasted and cracked into coarse pieces. Soy concentrates come from defatted soy flakes and contain 70% protein. It is a highly digestible source of amino acids and retains most of the SOYBEAN’S MANY USES Glycerol Fatty Acids Oil Products Sterols 12 Refined Soyoil Soybean Lecithin Edible Uses Technical Uses Ediible Uses Coffee Creamers Anti-Corrosion Agents Emulysifying Agents Cooking Oils Anti-Static Agents Bakery Products Filled Milks Caulking Compounds Candy/Chocolate Coatings Margarine Core Oils Pharmaceuticals Mayonnaise Diesel Fuel Pharmaceuticals Disinfectants Nutritional Uses Salad Dressings Dust Control Agent Dietary Technical Uses Salad Oils Electrical Insulation Medical Anti-Foam Agents Sandwich Spreads Epoxys Shortenings Fungicides Alcohol Ink - Printing Yeast Linoleum Backing Anti-Spattering Agent Metal - Casting/Working Oiled Fabrics Margarine Paints Dispersing Agents Pesticides Paint Plasticizers Inks Protective Coatings Insecticides Putty Rubber Soap/Shampoo/Detergents Stabilizing Agent Vinyl Plastics Wallboard Shortening Waterproof Cement Wetting Agents Calf Milk Replacers Cosmetics
  12. 12. Soy Flour Soymilk bean’s dietary fiber. When protein is removed from defatted flakes the result is soy protein isolate, the most highly refined soy protein. Containing 90% protein, isolates possess the greatest amount of protein of all soy products. They are a highly digestible source of amino acids and because of the bland taste can be added to food without jeopardizing its flavor or characteristics. Whole Soybean Soybean Protein Products Products Edible Uses Seeds Soy Flour Concentrates & Isolates Soybean 13 Stock Feeds Meal Soy Sprouts Baked Soybeans Technical Uses Edible Uses Feed Uses Full Fat Soy Flour Adhesives Alimentary Pastes Aquaculture Bread Analytical Reagents Baby Food Bee Foods Candy Antibiotics Bakery Ingredients Calf Milk Replacers Doughnut Mix Asphalt Emulsions Beer & Ale Cattle Feeds Frozen Dessert Binders-Wood/Resin Candy Products Dairy Feeds Instant Milk Drinks Cleansing Materials Cereals Fish Food Low-Cost Gruels Cosmetics Diet Food Products Fox & Mink Feeds Pancake Flour Fermentation Aids/Nutrients Food Drinks Pet Foods Pan Grease Extender Films for Packaging Grits Poultry Feeds Pie Crust Inks Hypo Allergenic Milk Protein Concentrates Sweet Goods Leather Substitutes Meat Products Swine Feeds Paints - Water Based Noodles Roasted Soybeans Prepared Mixes Hulls Particle Boards Candies/Confections Plastics Sausage Casings Dairy Fee Cookie Ingredients/Topping Polyesters Yeast Filter Material Crackers Pharmaceuticals High Fiber Breads Dietary Items Pesticides/Fungicides Fountain Topping Textiles Soynut Butter Soy Coffee Traditional Soyfoods Miso Soymilk Soy Sauce Source: American Soybean Association Tofu Tempeh
  13. 13. Quality Standards for US Soybeans and Soybean Products
  14. 14. Quality Standards for US Soybeans and Soybean Products The US market for soybeans and soybean products is well established with quality standards specified by either government decree or industry adopted trading rules. In fact, they are governed by both contract specifications and a government regulated system of guidelines that control inspection, sampling, grading and weighing of grain and oilseeds. These standards and inspection procedures are designed to ensure a uniform product and to facilitate the efficient trading and marketing of US grain and oilseeds. For soybeans, the bulk of these standards and inspection procedures are maintained by the Federal Grain Inspection Service (FGIS). For soybean products, they are established and maintained by the National Oilseed Processors Association (NOPA). As a result of such an open system the US has the ability to provide a wide array of quality of soybeans and soybean 17 products desired and specified by buyers with varied end use requirements. Federal Grain Inspection Service (FGIS) FGIS is a division of the recently created Grain Inspection, Packers and Stockyards Administration (GIPSA). FGIS facilitates the marketing of grain, oilseeds, pulses, rice and related commodities. It provides farmers, grain handlers, processors, exporters, and international buyers with information that accurately and consistently describes the quality and quantity of grain being bought and sold. FGIS currently: • establishes and maintains official US standards for grain (barley, canola, corn, flaxseed, oats, rye, sorghum, soybeans, sunflower seed, triticale, wheat and mixed grain), rice, beans, peas and lentils • inspects and weighs all exported grain, oilseed, and related products for domestic and export trade • establishes testing methods and procedures, and approved equipment or official inspection and weighing of grain
  15. 15. Foreign Material Soyhulls • provides a national inspection and weighing system that applies the official grading and testing standards and procedures in a uniform, accurate, and impartial manner • monitors certain grain handling practices to prevent the deceptive use of grading standards and official inspection and weighing results, and the degradation of grain quality through the introduction of foreign material, dockage, or other nongrain material to grain. US Grains Standards Act (USGSA) USGSA provides for the establishment of official US grain standards that are used to measure and describe the physical and biological properties of the grain at the time of inspection. The grades, classes and conditions reported on official certificates 18 are determined according to the factors defined in these standards. These factors may include test weight per bushel and percentages, by weight, of damaged kernels, foreign material, broken kernels and other factors. The certificate also notes specific conditions of the grain such as moisture content and infestation. No seasonal adjustments are made on US grades. Official US Standards FGIS and Basic Grading Definitions FGIS defines US soybean as any grain that consists of 50% or more of whole or broken soybeans that will not pass through an 8/64 round hole sieve and not more than 10.0% of other grains for which standards have been established under the USGSA. There are two classes for soybeans: yellow soybeans and mixed soybeans. Yellow soybeans are soybeans that have yellow or green seed coats and which in their cross section are yellow or have a yellow tinge, and may include not more than 10.0% of soybeans of other colors. Mixed soybeans are simply those that do not meet the requirements of the class of yellow soybeans.
  16. 16. Overtoasted SBM Pelleted Soyhulls Damaged kernels are soybeans and pieces of soybeans that are badly ground- damaged, badly weather-damaged, diseased, frost-damaged, germ-damaged, heat-damaged, insect-bored, mold-damaged, sprout-damaged, stinkbug-stung, or otherwise materially damaged. Stinkbug-stung kernels are considered damaged kernels at the rate of one-fourth of the actual percentage of the stung kernels. Foreign material is all matter that passes through an 8/64 round hole sieve and all matter other than soybeans remaining in the sieved sample after sieving according to procedures prescribed in FGIS instructions. Heat damaged kernels are soybeans and pieces of soybeans that are materially discolored and damaged by heat. Soybeans that have green, black, brown, or bicolored seed coats are classified as soybeans of other colors. Soybeans that have green seed coats will also be green in cross-sections of these other colored soybeans. 19 Bicolored soybeans will have seed coats of two colors, one of which is brown or black and the brown or black color covers 50% of the seed coats. Splits are soybeans with more than one fourth of the bean removed and that are not damaged. A couple of special grades and special grade requirements are garlicky soybeans and purpled mottled or stained soybeans. Garlicky soybeans are those that contain five or more green garlic bulblets or an equivalent of dry or partly dry bulblet in a 1,000 gram portion. Purple mottled or stained soybeans are those with pink or purple seed coats as determined on a portion of approximately 400 grams with the use of an FGIS Interpretive Line Photograph. Other Grading Quality Factors Interpretive factors can be used under FGIS rule so that visual grading aids assist inspectors in making subjective grading decisions and to reduce inter-market differences in inspection results. This consists of Interpretive Line Slides and Interpretive
  17. 17. Line Prints. The Interpretive Line Slide system consists of a portable tabletop viewer and photographic slide transparencies. The Interpretive Line Print and Slides are photographs and slides that exhibit particular attributes to allow a more uniform application of the general appearance factors and to aid an inspector in making grading decisions. For more information on FGIS and Basic Grading Specifications visit: NOPA and Basic Grading Definitions NOPA is essentially an industrial association that has its own grading requirements 20 and definition of their terms and guidelines. NOPA grading rules serve to regulate the trade of the two major processed forms of soybeans, soybean meal and soybean oil. The rules serve as a guide only for transactions. Parties to such transactions are free to adopt, modify, or disregard NOPA rules. Soybean Meal NOPA standards for soybean meal state that it shall be of fair merchantable quality, conforming to standard definitions and standard specifications of the association, as set forth in the NOPA trading rules. Soybean cake is defined as the product after the extraction of part of the oil by pressure or solvents from soybeans. Soybean meal is ground soybean cake, ground soybean chips, or ground soybean flakes. Soybean mill feed is the by-product resulting from the manufacture of soybean flour or grits and is composed of soybean hulls and the offal from the tail of the mill. A typical analysis is 13% crude protein and 32% crude fiber, and 13% moisture.
  18. 18. Soybean mill run is defined as the product resulting from the manufacture of dehulled soybean meal and is composed of soybean hulls and such bean meats that adhere to the hull in normal milling operations. A typical analysis is 11% crude protein and 24% crude fiber and 13% moisture. Soybean hull is the product consisting primarily of the outer covering of the soybean. A typical analysis is 13% moisture and varying degrees of protein and fiber. Solvent extracted soybean flake is the product obtained after extracting part of the oil from soybeans by the use of hexane or homologous hydrocarbon solvents. It shall be designated and sold according to its protein. NOPA’s standard specification for soybean flakes and high protein or solvent extracted soybean meal are produced by cracking, heating, and flaking dehulled 21 soybeans and reducing the oil content of the conditioned flakes by the use of hexane or homologous hydrocarbon solvents. Soybean Oil NOPA defines the standard of quality for soybean oil as a designated type of pure soybean oil of fair average quality based on the season's production. This must conform to standard specifications of the Association, and be made part of NOPA trading rules and which are subject to modification from time to time as conditions may warrant and upon the recommendation of the technical committee. The Association defines the types of crude soybean oil and says that edible crude soybean oil is any of the following: expeller pressed; expeller pressed degummed; hydraulic pressed; hydraulic pressed degummed; solvent extracted; solvent extracted degummed; or mixtures of any of the above types.
  19. 19. The primary traded soybean oil in the US is crude degummed soybean oil. It is defined as the product resulting from removal of phosphatides from crude soybean oil, and should contain no more than 0.02% of phosphorous as determined by the American Oil Chemists Society (AOCS) Official method Ca 12-55. The grade and quality of crude soybean oil sold under this rule are to be any of the above-designated types and conform to the following specifications: • not more than 0.5% moisture and volatile matter • a green color lighter than Standard B • a refined and bleached color not darker than 6.0 Red 22 • • a neutral oil loss not exceeding 7.5% not more than 1.5% unsaponifiable matter (exclusive of moisture and insoluble impurities) • a flash point not lower than 250˚F For more information on NOPA and Basic Grading Specifications visit:
  20. 20. Procuring Soybeans and Soybean Products
  21. 21. Procuring Soybeans and Soybean Products The American Soybean Association (ASA) does not buy or sell soybeans for export. ASA actively conducts programs and disseminates information for the promotion and expansion US soybean and soy product exports. The Chicago Board of Trade futures, storage, handling and transportation costs, insurance premiums, profit margins, etc., subject to supply and demand forces, determine the international market price for soybeans and soybean meal at a particular time and place. The United States is one of the world’s largest producers of soybeans (40%) and soybean meal (27%). World Soybean Production 2004/05 25 s United States 40% s Brazil 24% s China 8% s Argentina 18% s European Union 2% s India 2.5% s Others 5% World Soybean Meal Production 2004/05 s United States 27% s Brazil 16% s China 17% s Argentina 16% s European Union 9% s India 3% s Others 9% For market and trade data updates, visit
  22. 22. Identifying Suppliers There are many sources an importer can access to locate the names of potential soybean and soy product exporters. The following groups will assist importers with contact names of interested suppliers. American Soybean Association ASA is a private, non-profit organization with the goal of developing and expanding export markets for US soybeans and soybean products. Headquartered in St. Louis, Missouri, ASA maintains offices in eight countries. The regional office located in Singapore can assist importers in the Southeast Asian region with the search for US suppliers. For further information contact: ASA International Marketing Southeast 26 Asia, 541 Orchard Road, #11-03 Liat Towers, Singapore 238881, Tel: (65) 6737 6233, Fax: (65) 6737 5849, Email: Website: North American Export Grain Association (NAEGA) NAEGA is a trade association whose members include many private companies and cooperatives that handle a large percentage of US soybean product exports. Located in Washington, DC NAEGA provides importers with names of interested suppliers of US soybeans and soybean products. For more information contact: NAEGA, 1030 15th Street, NW, Suite 1020 Washington, DC 20005, USA, Tel: (202) 682 4030, Fax: (202) 682 4033. US Agricultural Offices In most US Embassies around the world, you can find an agricultural attachè (or commercial officer), representing the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA). The agricultural attaches can offer local importers a broad range of information regarding US government-assisted export programs (for example, GSM programs) as well as assistance in finding potential suppliers. Additionally, interested importers can contact their local commercial banker or the branch office of a US based commercial bank for a list of potential suppliers.
  23. 23. Purchase Contract Once a potential supplier(s) of US soybeans (or products) is identified, the importer should determine how offers will be evaluated. The importer can choose between a direct, private negotiation at one extreme or a public, formal invitation for bids (IFB) at the other extreme. Standard contract forms are available and cover the vast majority of the contractual details encountered in normal transactions. These standard contract forms for FOB transactions are under NAEGA No.2, FOSFA (Federation of Oils, Seeds, and Fats Association Limited) 3, and GAFTA 119 (for soybean meal). For CIF contracts, GAFTA (Grain and Feed Trade Association) 27 or 30 and FOSFA 54 are the general contract forms, and importers should make themselves very familiar with these various documents. 27 For more information, visit Points to Consider Before a Purchase Contract is Initiated For the buyer of US soybeans or soybean products, there are several factors that must be considered before a purchase contract can be initiated. Contact Information US and international (name/title/business/country/ bank references address/phone/fax/e-mail) Type of buyer Financing/credit considerations (examples: merchandising company, (examples: user of US government credit broker, feed manufacturer, industrial programs, private financing, specific further processor, government financial needs) buying agency, etc.) Quantity Date bids due and delivery (specific metric ton requirement) (shipment) period Quality and specifications Shipment details desired (be specific) (FOB, CIF, port of shipment/ destination, etc.)
  24. 24. US Bulk Handling and Export System
  25. 25. US Bulk Handling and Export System The United States has the most extensive and efficient system of capital assets devoted to the handling and processing of grain and oilseeds in the world. The combination of private initiative and capital investment has exploited modest public investments in infrastructure and regulation to create a system of unique transportation and handling alternatives where competition has driven down the costs of getting America’s agricultural products to the consumer. Shipping and Handling Equipped with one of the most modern port systems in the world, the US can efficiently deliver shipments of soybeans and soybean meal from virtually every major coastal outlet in the country. Large export orders travel by barge down the 31 Mississippi River system, and are loaded into large ships leaving from New Orleans. Major river systems in the U.S. The Mississippi is the nation’s most important waterway. Seattle • Columbia Portland • Grays Harbor • Missouri Snake Hudson Wisconsin North Platte Pacific Ohio Platte Northwest Illinois Arkansas • Norfolk Mississippi Tennessee Canadian Red Alabarna Chattahooche • Mobile • Major U.S. Ports • New Orleans U.S. GULF
  26. 26. Alternatively, shipments to Asia can also be executed off the Pacific Northwest where, similar to the US Gulf, cargoes can be loaded into various sized vessels in single or multiple commodity shipments. Soybean meal may also be exported from the US Eastern Seaboard or through its Great Lakes. Gulf Coast (US Gulf) The Mississippi River, regarded as the transportation gateway to the interior of the US, commands a fleet of over 11,500 hopper-covered barges, towed by 2,000 towboats that ply the river with bulk cargo. Another fleet of tank barges caters to viscous cargoes, such as soybean oil. There are nearly 6,000 miles of navigable routes in the Mississippi River Basin including the Mississippi, Missouri, Ohio, 32 Illinois, Arkansas, Tennessee, White, Cumberland, Alabama and Minnesota rivers. Through this system, river transportation reaches every major soybean producing state in the US providing access to 80% of the US’s soybean production. Pacific Northwest (PNW) The Pacific export range facilities have a freight advantage over the other ranges to destinations in Asia, offering a much shorter distance from the Pacific Northwest to Asian destinations, and correspondingly cheaper ocean freight. The port facilities are just as efficient as those found in the US Gulf. The Great Lakes The rising popularity of the Mississippi River barge system has seen a slip in the importance of the Great Lakes despite its unique inland waterway. The St Lawrence Seaway provides access to the Lakes’ ports that connects Lake Superior, Lake Huron, Lake Erie and Lake Ontario. Following the completion of the Seaway, a separate class of vessels was specially built – with the specific intention of plying the waters of the Great Lakes.
  27. 27. Specialty / Identity Preserved Soybeans
  28. 28. Specialty / Identity Preserved Soybeans Food beans have been selected and bred over the past several decades for making into various types of soyfoods for direct human consumption. They are called specialty or identity-preserved (IP) soybeans, and usually carry a premium price in the market. Production for this category of soybeans requires a uniform and uncontaminated supply of quality soybeans, with only the particular traits desired by the end user. As such, production and handling of specialty or IP soybeans must be done under a controlled system of identity preservation. Handling Process for IP Soybeans Contract Growers produce IP crops Farm Specific varieties are grown Bagging for Transport Farmers transfer crops to 35 on an individual contract under contract, harvested bags or sealed containers, basis. Farmers and buyers and stored separately on the maintaining separate contract well in advance of farm. Buyers often provide distribution lines for specific planting for a specific variety the seed. varieties. at a specific premium. Ships Delivery to Port Elevator The IP shipments are loaded IP crops are loaded into IP varieties are graded and onto container ships into containers or dedicated handled using special separate holds or barges carrying limited procedures. They are stored compartments and stored cargo, or otherwise shipped in separate bins, containers completely separated from by railroad. or silos. other shipments during the trans-oceanic trip. Port of Discharge Transport Storage at Processors On arrival, the shipments are Distribution to overseas The IP deliveries are stored unloaded using a dedicated customers from the entry port in separate dedicated system and stored separately us carried out using coastal storage. from other shipments. vessel, barge, truck or railroad – maintaining separation from other crops throughout. Processing Specific varieties are processed using separate batch runs or lines for high-value products.
  29. 29. Payment Options
  30. 30. Payment Options Of critical importance to any international commodity transaction is the determination of how the payment for goods will be handled. This is often the first question asked of a potential importer by an exporter of US soybeans and/or its products. The ability of a potential importer to address this issue early in the commodity procurement process will not only reduce the time necessary to complete negotiations but help the importer arrive at a more favorable price as well. Letter of Credit (LC) The Letter of Credit (LC) is the most common payment standard for the international grain trade. The LC should set a time limit for completion and specify the exact documents necessary to fulfill the terms of credit. A common payment term required by many exporters is for the LC to be advised to and 39 confirmed by a “first class US or Western European bank acceptable to the seller.” Payment options vary in cost to the importer and/or exporter and degree of risk exposure, both in terms of monetary exposure and performance risk. In examining the various payment options, the importer should always bear in mind that local laws and regulations may influence both these factors. The importance of food relations between importers and exporters is critical to the success of domestic and international trade and should not be hampered by poor communication and lack of effective follow-up. It is important to view each trade with a long-term outlook, and build enough flexibility in all aspects of operations to ensure successful trading.
  31. 31. USDA Export Credit Guarantee Programs The United States government, through the United States Department of Agriculture (USDA), in recognizing the need to minimize payment risks to exporters and facilitate US grain, soybean and soy product exports annually establishes and funds export credit guarantee programs. The two largest programs, the Export Guarantee Credit Program (GSM-102), and the Intermediate Export Guarantee Program (GSM-103) provide financing for over 5 billion US dollars of US agricultural exports. Key points of the Export Credit Guarantee Programs: 40 • The GSM-102 and GSM-103 are administered through the Commodity Credit Corporation (CCC), a division of the USDA. • The CCC provides a partial guarantee on the foreign credit risk posed to US financing banks (98% of the FOB value of the export). On an exception basis, the guarantee may also cover freight costs. • Validity for a GSM-102 guarantee may range from 90 days to 36 months; validity for a GSM-103 guarantee may range from 36 months to 10 years, but is generally granted to 7 years. • The GSM guarantee allows US banks to offer low interest rates and extended loan tenors to foreign banks which may in turn, extended favorable terms to their importer clients. • GSM funding is structured as bank-to-bank refinancing of a letter of credit; the letter of credit is issued by the importers bank and refinanced by the US bank. The importer’s bank has discretion to extend the GSM financing terms to the importer. • The importer’s bank, as well as the US exporters and banks must be approved by the CCC for GSM business. Importer approval is not required. • A wide variety of US agricultural products may be re-exported under GSM. The program announcement for each country or region lists the approved products.
  32. 32. Another of these programs is the Supplier Credit Guarantee Program (SCGP). The SCGP is unlike any other credit guarantee or insurance program in the world. It is designed to make it easier for exporters to sell US food products overseas by insuring short-term, open account financing. Under the security of the SCGP, US exporters become more competitive by extending longer credit terms or increasing the amount of credit available to foreign buyers without increasing financial risk. Foreign buyers benefit because they can increase their purchasing power and profit opportunities, and gain significant cash flow management advantages. Twelve steps to participating in the Supplier Credit Guarantee Program: • The exporter must qualify as a program participant. 41 • He must determine if the USDA has announced credit guarantee coverage for the importing country and product to be imported. • Both the exporter and importer negotiate terms of the export credit sale including arrangements for execution of the promissory note. • Once a firm sale exists, and before export, the US exporter applies for payment guarantee from USDA. • The exporter pays the guarantee fee to USDA. • The importer executes a US dollar promissory note. • The exporter ships the product as agreed. • The exporter submits evidence of export report (EOE) to USDA. • For immediate payment, exporters may assign guarantee to a US financial institution. • The importer receives the products and makes payment as outlined in the promissory note. • If payment is late, the exporter must inform USDA. • USDA will pay claims that are in good order and will seek the full overdue amount from the importer. For the latest and complete details regarding these programs, please visit the USDA website at
  33. 33. Risk Management
  34. 34. Risk Management The business of producing, consuming, and trading in soybeans and their products, otherwise known as soybean complex, is one that is fraught with uncertainties. These uncertainties come in many shapes and sizes and return seasonally with the cyclical nature of the growing season, manifesting themselves most obviously in price risk. While there are many risks associated with a business dealing in soybeans such as transaction risk, execution risk, production risk, and systemic risk – it is price risk that offers the most visible threat to a firm’s economic health. Soybean and soy product importers first need mechanisms to help them discover market price when a decision to buy or sell a commodity is demanded of them. Once the market price is identified, they must find a mechanism to reduce the price risk between the time of transaction and the actual delivery of the goods if they 45 are, like most of us, risk averse; the most common mechanism or tool being the forward cash contract, the most visible the futures contracts traded in the soybean, soybean oil, and soybean meal futures and option pits at the Chicago Board of Trade. Common Risk Management Tools Forward Cash Contract A forward cash contract can be an effective method of risk management for soybean complex market participants. The purchase or sale of the physical commodity in the cash market for delivery at a specified later date is the most common form of cash trade. The forward cash contract involves a direct relationship between two individual parties, each of whom acts as his or her own guarantor. The major attraction of the forward cash market is that the buyer or seller who needs to manage price risk can secure a transaction that eliminates exactly that price risk from which he is seeking relief. Depending on the liquidity of trade, the governing rules of trade and the availability of quality trading partners, the forward cash markets are an effective and efficient tool for managing price risk.
  35. 35. Exchange Traded Futures The first risk management tool grain producers and consumers may use to minimize risk is the exchange traded futures contract. At futures exchanges such as the Chicago Board of Trade (CBOT), futures contracts are traded between market participants. A futures contract is an agreement to purchase or sell a commodity for delivery in the future at a price that is determined at initiation of the contract. This contract then obligates each party to fulfill its terms at the specified price by either the delivery of the standardized quantity and quality of the commodity, or by offset. Exchange Traded Option At futures exchanges across the globe, another form of risk management has 46 developed over the last 25 years. The exchange traded option on a futures contract is a unilateral contract which gives the buyer the right to buy or sell a specified quantity of a commodity at a specific price within a specified period of time, regardless of the market price of that commodity. Exchange traded options actively trade at the futures exchanges in the US and abroad and they are an integral part of many feedgrain risk management programs. Over the Counter (OTC) Swap A relatively new risk management tool available to soy complex market participants is the over the counter or OTC swap, derivative and trade option market. A swap is a forward contract with the price typically fixed at inception against an underlying index or indices. Settlement can be agreed on the basis of the value of that index or those indices at any single point in the future, but is usually the basis of an average of values over a pre-determined period of time. A swap does not generally convey the right or obligation for physical delivery. Derivatives Derivatives are called such because they derive their value from another instrument. A broad definition would include products traded on established futures exchanges, both futures and options, as well as the swap products above. In general use, the term derivative is distinguished from other forms of risk management first according to whether their primary use is for shifting market risk and, second, in that they incorporate characteristics of two or more of the other tools discussed earlier.
  36. 36. Trade Options A Trade Option is a combination of the derivative market and the cash market. Rather than requiring delivery of the physical commodity as in forward contracts, a trade option would allow cash traders to utilize the rights involved in exchange traded options in the cash markets. A trade option is generally an OTC contract between commercial interests that would give the buyer the right to purchase or deliver grain against a set price and time period. For more information on soy visit or 47
  37. 37. Glossary
  38. 38. Glossary Advice of fate Importer’s bank notification Bull One who is bullish or believes the and confirmation to seller’s bank that the market will trade higher. draft and documents have either been accepted or rejected under the collections Bull spread The simultaneous purchase method of financing grain purchases. of futures or cash in a nearby period and the sale of like futures or cash in a deferred Amino Acids Chief components and period. The trader profits when the spread determinants of the characteristics of a narrows. protein; the building blocks of living tissues. Eighteen different amino acids commonly Bullish Any factor affecting the market, occur in our food supply and eight are causing it to trade higher. considered essential because the body cannot make them. Carrying charges The difference in price between one period to another, carrying Basis The difference between the cash charges can be positive or negative. When price for a commodity delivered and the they are positive the market is said to be “at futures price for any given contract month a carry”; when they are negative “in an of the same, or different, commodity. When inverse.” the cash price is below the futures price, the basis is negative; when above the futures Cash basis The basis of a physical price, the basis is positive. The basis is commodity in a given market; i.e. “the cash determined by traders of grain. The basis for Toledo corn.” predictability of the basis is very important to the hedger. Cash grain The physical commodities, the definition encompasses all or any markets. Bear One who is bearish or believes the market will trade lower. Cash market A market in which buyers and sellers purchase/sell physical 51 Bear spread A short spread in the futures commodities. This can refer to a specific or cash markets. A trader buys futures or place, but it can also refer to the transactions cash for the more distant period and sells themselves and need not be confined to any the futures or cash of a nearby period which one place. he believes overvalued. The trader profits when the spread widens. Cash position A trading position in a physical commodity. Bearish Any factor affecting the market that causes it to go down. Cash price The price of the physical commodity. Bill of Lading Document that conveys the title to the goods; a contract by a carrier for Confirming bank The financial institution delivery of the goods; and a receipt for the that confirms payment against presentation merchandise being shipped. The bill of lading of negotiated documents; preferably a first may be issued as either straight (non- class US bank. negotiable) or to order (negotiable). Cooking oil A refined, bleached, and Bleaching Treatment of a fat or oil with deodorized oil which has not been further a material such as activated charcoal or processed to remove the higher melting point diatomaceous (Fullers) earth which removes portions of the oil. Cooking oils tend to or reduces the amount of coloring materials crystallize or set up semi-solid at temperatures normally present in a refined oil. The much below about 70˚F. For this reason, bleaching process may be carried to the heating coils should be installed in storage degree desired depending upon the color tanks for cooking oils in contrast to salad required by the eventual usage of the oils where no heating coils are usually processed oil. necessary.
  39. 39. Cracking The breaking of the whole seed commodity deliveries on futures contracts into several pieces to facilitate dehulling and upon their maturity. flaking. Delivery period The time period within Crude soy oil Sometimes referred to as which a buyer will provide a vessel to receive crude raw soybean oil; the unrefined oil delivery on FOB contracts. produced by any one of the procedures described for the extraction of oil from Delivery points Those locations and soybeans. It is customary to filter the oil facilities designated by a commodity and/or allow it to settle after being processed exchange where stocks of a commodity may from the soybeans as required by the be delivered in fulfillment of a futures sale standard trade specifications. Crude soy oil according to exchange rules. is a mixture of triglycerides composed of unsaturated fatty acids (oleic, linoleic, Deodorizing A process involving use of linolenic) and saturated fatty acids, together high vacuum and superheated steam in with usually not more than 1.5% of free fatty washing of fats and oils. Deodorization acids and from 1.8% to 3.2% of removes from fats and oils materials originally phospholipids, depending on the quality present or introduced during previous and kind of soybeans and the procedure processing which would contribute used in processing. objectionable flavors and odors to the finished product. Dead weight The vessel’s total carrying capacity, i.e. cargo plus fuel and water and Derivative A risk-sharing instrument that constant (crew, machinery, spare parts, etc). has the force of a binding contract and Dead weight cargo capacity is what remains derived from an underlying cash market. after deducting fuel and water, etc. as above Forward contracts, futures, options on futures for total dead weight. are all derivatives. In colloquial use 52 Defatted soy flour Flour produced by the nearly complete removal of the oil from derivatives often referred to a subset of this group and defined to be products that have characteristics of both swaps and options soybeans by the use of hexane or other and do not trade on an exchange. homologous hydrocarbon solvents; usually contains about 1% fat. Diglyceride A chemical combination of fatty acids and glycerin in the proportion of Degummed soy oil Sometimes referred two fatty acid units to one glycerin unit. A to as crude degummed soy oil; the product diglyceride may result from the combination resulting from washing crude soy oil with of the units or by splitting off one fatty acid water and/or steam or another degumming unit from a triglyceride during fat breakdown agent for a specified period of time and then or hydrolysis. separating the oil-and-water mixture, usually by centrifugation, to remove the phos- Draft A negotiable instrument containing phatides. It shall not contain more than an order to pay. A draft can be drawn 0.02% of phosphorus without a discount payable upon demand (sight/demand draft) penalty. or time. Also known as a bill of exchange. Degumming The removal of phospholipids Edible crude soy oil Soy oil which shall from vegetable oil by a water washing step. be of any of the following designated types produced from mature yellow soybeans: Delivery When ownership of a given (1) expeller pressed, (2) expeller pressed futures contract is switched into ownership degummed, (3) hydraulic pressed, of the actual cash underlying the given futures (4) hydraulic pressed degummed, (5) solvent contract during its expiration period. extracted, (6) solvent extracted degummed, and (7) mixtures of any of the above- Delivery markets Commodity futures described types. When the oil is produced exchanges which provide for making cash by solvent extraction, the name of the solvent used in the process must be given.
  40. 40. Edible refined soy oil Crude or elevator or vessel or barge. Fumigant, which degummed soy oil which has been subjected can be toxic, should be handled by a firm to special refining processes to adapt it licensed by the government. specifically for use in food products. In addition to treatment with alkali, bleaching, Fundamental analysis A three-stage partial hydrogenation, the oils may be also study of the actual supply and demand winterized. These oils are further classified conditions in order to make price and price as salad oils, cooking oils, or shortening. trend analysis. Elevator convenience Elevators generally Futures account An account opened load vessels of the same commodity in the with a broker to buy and/or seller order in which they have filed notice of commodities on the futures exchanges. readiness (NOR.) However, it would not be unusual to load a soybean vessel with a later Gumming Formation and accumulation filing date before a corn vessel with an of a fat insoluble sticky material resulting earlier filing of NOR. This would be elevator from continued heating of fats and oils. The convenience. However, the charterer’s agent gummy material is produced by oxidation should investigate if a vessel of the same and polymerization of the fat and represents commodity with a later filing date is loaded fat breakdown products which collect on in front of one with an earlier filing date. heating surfaces. Expeller Equipment for expressing oil Hedging Shifting the price risk to reduce from oil seeds, consisting of an augur moving or remove any unforeseen price movements through a slotted barrel through which oil in the future. The risk is shifted to those who can drain. Also called a continuous screw are willing to take on the risk in hopes of press. making a profit (speculators). Extruder A jacketed augur used as an economical cooker and as a means of texturizing soy flours or concentrates. Can High-fat soy flour Flour produced by adding back soy oil and/or lecithin to defatted soy flour to a specified level, usually 53 also be used to treat oilseed flakes before in the range of 15%. solvent extraction. Hydrogenated soy oil During the Extrusion A process for texturizing soy process of hydrogenation, the soy oil is flours or other proteins using high pressures exposed to hydrogen gas in the presence and temperatures in an extruder. of heat and a catalyst (nickel, copper chromite) and the hydrogen combines with Fully refined soy oil The edible oil certain of the chemical components produced from crude or degummed soy oil (unsaturated fatty acids) of the triglycerides which has been treated with dilute alkali with a resultant increase in the melting point solution (caustic refining) or neutralization, of the oil; sometimes referred to as treated with absorbent clay materials ‘hardening.’ (bleaching) and subjected to steam distillation at high temperatures under vacuum Hydrogenation The process of chemically (deodorizing). Such oil may also be produced adding hydrogen in the presence of a catalyst by a process called physical (steam) refining to the unsaturated, ‘hydrogen short’ portions which consists of degumming, bleaching of a natural fat. The addition of hydrogen and neutralization by final step of reduces the reactivity of the fat toward oxygen deodorizing. and thus stabilizes and retards rancidity development in the fat. Hydrogenation Fumigation Application of a pesticide or usually raises the melting point of a fat or chemical to a cargo in order to rid the cargo changes it from a liquid oil to a solid fat. of insects. The most common type of fumigant is phosphine gas, which is applied, in several Hydrolyzed soy protein Made from different methods, to grain while in the soybean flours, concentrates or isolates,
  41. 41. treated with an acid or a base or an enzyme meat in processed items such as patties, and then dried. chilli, casseroles, etc. Irrevocable, confirmed documentary Melting point Usually the temperature letter of credit payable at sight Letter at which a natural or processed fat becomes of credit which may be canceled only with perfectly clear and liquid or at which a disc the agreement of the issuing bank, confirming of the fat assumes a spherical shape under bank and the seller. It specifies the documents prescribed conditions of raising the which must be presented under the letter of temperature of the fat sample. The greater credit. The holder (beneficiary) will be paid the degree of unsaturation the lower the when the documents specified in the L/C melting point. Hydrogenation raises the are presented to the bank. melting point. Isolated soy protein Protein which has Positions (long or short) Market been greatly concentrated and removed commitments. A trader whose purchases from its native location by chemical or exceed his sales is said to be long or to have mechanical means. It is generally produced a long position. One whose sales exceed by extracting protein from white flakes or purchases is said to be short or have a short flour with water or a mild alkali. Isolates position. usually have a protein content of at least 90%. Pre-advice The buyer must provide to the seller the name of the vessel, its date of Kibbled soybean meal The product readiness at load port, and the capacity of obtained by cooking ground solvent extracted the vessel prior to the minimum number of soybean meal, under pressure and extruding days specified in the contract. Ample time from an expeller or other mechanical pressure must be given for the seller to have the cargo device. It must be designated and sold available for prompt loading. 54 according to its protein content and shall contain not more than 7% crude fiber. Price discovery The process by which the futures and cash markets allow both Loading berth line-up When the vessel buyers and sellers to find out price at a given arrives in port and has received its loading moment. passes, it is entered into the line-up of vessels in order to take its turn in the loading berth. Prime US bank First class U.S. bank. Loading charges The price incurred for Refining Treatment of a natural or the loading of cargo. The charges vary processed fat to remove impurities. Refining depending on the kind of vessel specified, is accomplished by treatment of the fat with the port visited, and the time spent at berth. caustic soda, centrifuging, washing with water and centrifuging gain. The separated Long position The position of buying a refined fat or oil id dried by heating under cash commodity or futures contract without vacuum. having offset that position. Remittance taxes Taxes paid for Margin Deposits posted by all futures transferring foreign currency in and out of buyers or sellers to the brokers handling a country for international transactions. their accounts, guaranteeing that the buyer/seller will meet his obligation. Resistance area The point above which prices have not risen in the recent past. Market order When a buyer/seller on Indicates that prices should not go above the futures market informs his broker to the area in (at least) the near future and that perform a transaction at the market price. it may be a good level to test the short side of the market. Meat extenders Use of soy or other vegetable proteins as partial substitutes for Riders Contract extension clauses which are attached to standard contracts.
  42. 42. Salad oil A refined, bleached and Soy protein concentrate Prepared deodorized edible oil which has been from high quality sound, clean, dehulled submitted to a chilling process before soybean seeds by removing most of the oil packaging. The chilling causes solidification and water soluble non-protein constituents of the higher melting point portions of the and must contain not less than 65% protein fat and permits removal of this material on a moisture-free basis. which would otherwise solidify and cloud in packaged oil stored at lower climatic Soy protein isolates The major protein- temperatures. A good salad oil will have a aceous fraction of the soybeans prepared high Cold Test, i.e. will withstand holding from dehulled soybeans by removing the for many hours at 32˚F before showing any majority of non-protein components and signs of clouding. Some oils are natural must contain not less than 90% protein on salad oils and do not require winterization. a moisture-free basis. Service and facility charge Charged Soya As with the term soybeans, soya by export facilities, primarily on the US describes a legume, the botanical name of Pacific northwest range, to vessels loading which is Glycine max (L) Merrill. Also, soya at their berths. can be used when describing the entire plant, crop or category of products derived Shipment periods Under a CIF or C&F from soybeans. Differentiated from the term contract, the time period within which the soybeans which can be used to describe the grain must be shipped. By ‘shipped’, the actual seed of soya. Internationally market, and most contracts which govern acceptable. these shipments, means the date of the bill(s) of lading. Soybeans A legume, the botanical name of which is Glycine max (L) Merrill; a summer Shipped weight The weight of the grain annual varying in height from less than a that is shipped; determined by/under the supervision of FGIS or a state weighing agency. Shipped weight is almost always foot to more than 6 feet and in habit of growth from stiffly erect to prostate; the cultivated plant may reach a height of 3 feet 55 the weight that governs. The weight certificate or more. The seeds (soybeans) are borne in is final. pods that grow in cluster of three to five with each pod usually containing two or three Short position The position of selling s more seeds. The oil content of the soybean cash commodity or futures contract without varies from 13% to 26% (average 18% to having offset the position with a purchase 22%) and from 38% to 45% protein (on a of equal size. moisture-free basis.) Soybeans were grown for centuries in the Orient and first introduced Shortening A plastic or semi-solid fat to the United States early in the 19th century. used in the production of bread, cakes and Soybeans grow best in areas having hot, other bakery products. It is also used for damp summer weather but they can be frying as it becomes liquid when heated grown under a great variety of climatic much above 100˚F. It derived its name from conditions. its effect in making the baked product short or tender. Soybean cake Product resulting from the extraction of part or all of the oil by Soy flour and/or grits The ground, pressure or solvents from soybeans, sold screened, graded product obtained after according to its protein content and further extracting most of the oil from selected, described by its process of manufacture. sound, clean, dehulled soybeans. They are produced from grinding the defatted soy Soybean extraction/processing The flakes. Grits are courser ground than soy procedures involved in the separation of the flour. Protein range is 40% to 60%. It must oil and the protein meal; also called ‘crushers’ contain not more than 4.0% crude fiber. or oil mill operations. There are two types of processes presently used in the United
  43. 43. States for this purpose: (1) Solvent extraction: Soybean meal, dehulled, solvent the process whereby the oil is leached or extracted Obtained by grinding the flakes washed (extracted) from flaked soybeans remaining after removal of most of the oil by the use of commercial hexane as the from dehulled soybeans by a solvent solvent. The level of oil in the extracted flakes extraction process. It must contain not more can be reduced to 1% or less by this than 3.5% crude fiber. processing method. The products resulting from the use of this process are designated S oy b e a n m e a l , m e c h a n i c a l in the trade as ‘solvent extracted,’ e.g. extracted The product obtained by ‘Solvent extracted soybean meal,’ ‘dehulled grinding the cake or chips which remain solvent extracted soybean meal,’ ‘solvent after removal of most of the oil from soybeans extracted soy grits,’ ‘solvent extracted soy by a mechanical extraction process. It must flour.’ Practically all soybeans processed in contain not more than 7% crude fiber. the United States are processed by the solvent extraction system. (2) Continuous pressing: Soybean meal, solvent extracted a continuous pressing process, at elevated The product obtained by grinding the flakes temperatures, using expellers or screw which remain after removal of most of the presses which utilize a worm shaft oil from soybeans by a solvent extraction continuously rotating within a pressing process. It must contain not more than 7.0% cylinder or cage to express the oil from crude fiber. soybeans after they have been ground and properly conditioned. The oil content of the Soybean mill feed Composed of soybean resulting press cake is reduced to from 4% hulls and the offal from the tail of the mill to 6% by this processing method. Although which results from the manufacture of soy technically incorrect, the products resulting grits or flour. It must contain not less than from this type of processing are often referred 13% crude protein and not more than 35% to as ‘expeller,’ e.g. ‘expeller soybean meal.’ crude fiber. 56 Soybean lecithin The mixed phospholipids product obtained from soy oil by the Soybean mill run Composed of soybean hulls and such bean meats that adhere to degumming process, contains lecithin, the hulls which results from normal milling cephalin and inositol phosphatides, together operations in the production of dehulled with glycerides of soy oil and traces of soybean meal. tocopherols, glucosides and pigments. It is designated and sold according to Soybean processor An individual, or conventional descriptive grades with respect a group of two or more individuals working to consistency and bleaching. The dehydrated together as a company or firm, whose emulsion of mixed phosphatides and soy oil primary business is the separation of the oil is further processed to produce the and meal in soybeans. The activities of a commercial grades which may be described processor may also include refining and/or as follows: plastic or firm consistency; soft distribution of the oil as well as distribution consistency; fluid; unbleached; bleached; or further production with soybean meal or and double bleached. High quality soybean protein. commercial lecithin contains 60% to 65% phosphatides. Soybean protein product, chemically modified A soybean product that has Soybean meal Ground soybean cake, been processed to primarily modify the ground soybean chips or ground soybean natural protein structure by utilizing acids, flakes, sold according to its protein content alkalis or other chemicals without removing and further described by its process of significant amounts of any nutrient constituent. manufacture. Typical composition: protein 44.0% minimum, fat 0.5% minimum, fiber Soybean seed coats (hulls) Soybean 7% minimum, and moisture 12.0% maximum. hulls consist primarily of the outer covering of the soybean.
  44. 44. Soyfoods Term for edible (primarily for Support area Tthe point below which human consumption) soy-based products. prices have not dropped during declines in These include traditional soyfoods such as the recent past. The support line, which can tofu, soymilk, tempeh, soy sauce etc: soy be drawn horizontally or at an angle, tells protein products produced after processing the trader that prices are not likely to go (as described above) such as soy flour, soy below this support in the near future. concentrates and isolated soy proteins: soy oil products such as refined soy oil, Swap A forward contract, priced basis a hydrogenated soybean oil and soybean negotiated index or indices, that does not lecithin: and other edible buy-products such include physical delivery. as soybean hulls and soy fiber. Also, ‘second generation’ soyfoods, a term to describe Technical analysis The study of the consumer oriented products that use a market to predict future price movements on soyfood as a primary ingredient, such as the basis of past price movements. tofu or soymilk-based nondairy frozen desserts or tofu-stuffed ravioli. Toasting The term commonly but erroneously applied to the processes (moist) Soymilk A protein-rich, milk-like liquid of cooking soybean meal, flour or grits by typically obtained from the soaking and atmospheric or pressure methods for the grinding of whole soybeans with water; or, purpose of increasing the protein efficiency hydrating whole, full-fat soy flour; cooking of these soy products or improving their the resultant slurry, and filtering all or part functional properties and/or improving of the soy pulp or fiber from the cooked physical texture. liquid. Modern systems for soymilk production may vary in technique. Soymilk Trimmed cargo Cargo is manually or prepared in this manner can be used to mechanically moved to the edges of the make tofu, drunk as is, spray-dried or holds for safe stowage to reduce any risk of sweetened and flavored as a beverage. Spinning A process for texturizing soy shifting during the voyage. Ordinary vessels require cargo to be trimmed. 57 protein isolate by forcing a concentrated Unsaturation A term descriptive of the solution of protein through a small opening carbon-hydrogen make-up of a material into a coagulating bath. such as fat or oil. The term refers specifically to a shortage of hydrogen atoms in the oils Spreads The price difference between structure. The less hydrogen, the greater the futures months or between markets or related degree of unsaturation and the greater the commodities. Spreads help reduce price reactivity with oxygen. Unsaturation in a fat risks. Most often used to describe a futures or oil means easier formation of peroxides, position in which the trader is long one easier development of rancidity and more contract month of a given commodity and tendency to polymerize. Highly unsaturated short another month of the same commodity. fats are usually oils, and solid fats have lower unsaturation. Stevedoring The job involving the stowing and trimming of the vessel. Most vessel Volatility A measure of the stability of a charters are FIOST, which means that the price series; the speed at which price charterers arrange stevedoring. Since many changes. elevators use in-house stevedores, it is cheaper for the importer (charterer) to buy grain under a contract which includes stowing and trimming.
  45. 45. Useful Resources
  46. 46. Commodities Futures Trading Soy Related Organizations Commission (CFTC) 2033 K Street, NW Federal Grain Inspection Service (FGIS), Washington, DC 20581 GIPSA, USDA USA Stop 3601 Tel: 202-254-6387 1400 Independence Avenue, SW Fax: 202-254-3061 Washington, DC 20250-3601 Tel: 202-720-5091 National Futures Association (NFA) Fax: 202-205-9237 200 West Madison Street Website: Suite 1600 Chicago, IL 60606-3447 North American Export Grain USA Association (NAEGA) Tel: 312-781-1300 1250 I Street, NW Fax: 312-781-1467 Suite 1003 Website: Washington, DC 20005 Tel: 202-682-4030 Fax: 202-682-4033 Major US Soy Exporters Website: Ag Processing Inc The Grain and Feed Trade Association 12700 W. Dodge Rd. (GAFTA) P.O. Box 2047 GAFTA House Omaha, NE 68103-2047 6 Chapel Place Tel: 402-496-7809 Rivington Street, London EC2A 3SH Email: Tel: 44-20-7814 9666 Internet: Fax: 44-20-7814 8383 Website: Archer Daniels Midland Company P.O. Box 1470 61 National Oilseed Processors Association Decatur, IL 62525 1300 L Street, NW Tel: 217-424-5200 Suite 1020 Email: Washington, DC 20005-4168 Internet: Tel: 202-842-0463 Bunge North America Inc Fax: 202-842-9126 P.O. Box 28500 Website: 11720 Borman Drive St. Louis, MO 63146 Federation of Oil, Seeds and Fats Tel: 314-292-2000 Association (FOSFA) International Fax: 314-292-2110 20 St Dunstan’s Hill Internet: London EC3R 8HL United Kingdom Cargill, Inc Tel: 44-71-283 5511/2707 P.O. Box 9300 Fax: 44-71-623-1310 Minneapolis, MN 55440-9300 Tel: 952-742-7575 Chicago Board of Trade (CBOT) Internet: 141 W Jackson Blvd CGB Enterprises, Inc Chicago, IL 60604-2994 1-800-669-0085 ext 229 Tel: 312-341-7955 Email: Fax: 312-341-3027 Internet: Website:
  47. 47. Louis Dreyfus Corporation The Scoular Company 20 Westport Road 250 Marquette Ave Wilton, Connecticut 06897-0810 Suite 1050 Tel: 203-761-2285 Minneapolis, MN 55401 Fax: 203 761-2375 Tel: 612-8513756 Email: Internet: Internet: For more information, contact Owensboro Grain or visit 719 E. Second St., P.O. Box 1787 Owensboro, KY 42302-1787 Phone: 270-926-2032 Fax: 270-686-6509 Email: 62 Internet: Useful Web Linkss Agbios (Biotechnology) American Oil Chemists’ Society (AOCS) American Soybean Association Biotechnology Industry Organization CAFTA-DR Information Website Chicago Board of Trade Feedstuffs Grain Inspection, Packers and Stockyards Administration (GIPSA) Illinois Council on Food Agricultural Research (C-FAR) International Association of Seed Crushers National Biodiesel Board National Institute of Oilseed Products National Oilseed Processors Association National Soy Ink Information Center Soy and Health Soya Oilseed Bluebook Soyatrade Soybean Meal Information Center Soyfoods Association of North America Soystats Stratsoy The Institute of Shortening and Edible Oils United Soybean Board US FAS Trade Offices (worldwide)
  48. 48. ASA INTERNATIONAL MARKETING 12125 Woodcrest Executive Drive Suite 140 St. Louis MO 63141-5829, USA Tel: (1314) 985-0988 Toll Free: 800-408-4993 Fax: (1314) 754-1351 ASA INTERNATIONAL THAILAND ASIA SUBCONTINENT MARKETING OFFICES Mr. Opas Supamornpun, Mr. Virgil Miedema, Consultant Regional Director SOUTHEAST ASIA 59/43 Baan Klang Muang 149 Jor Bagh Mr. John A Lindblom, Ladprao 71 Road New Delhi – 110 003 Regional Director Ladprao, Bangkok 10230 INDIA 541 Orchard Road THAILAND Phone: (91 11) 2465-1659 #11-03 Liat Towers Phone: (662) 5395373, Fax: (91 11) 2465-1526 REPUBLIC OF SINGAPORE 5395332 Email: 238881 Fax: (662) 539 5256 Website: Phone: (65) 6737-6233 Email: Fax: (65) 6737-5849 JAPAN Email: VIETNAM Mr. Takehiko Nishio, Website: Mr. Tran Trong Chien, Country Director Consultant 4th Fl. KY Tameike Bldg. INDONESIA Mr. Ali Basry, Consultant 13/F Hanoi Towers 49 Hai Ba Trung Street 1-6-19 Akasaka Minato-ku, Tokyo 107-0052 63 Wisma Mitra Sunter, #402 Hanoi, VIETNAM JAPAN Blok C-2 Boulevar Mitra Sunter Phone: (844) 934 3979 Phone: (81 3) 5563-1414 Jl Yos Sudarso Kav. 89 Fax: (844) 934 3966 Fax: (81 3) 5563-1415 Jakarta 14350 Email: Email: INDONESIA Website: Phone: (6221) 651 4752 PEOPLE’S REPUBLIC Fax: (6221) 651 4753 OF CHINA KOREA Email: Mr. Phillip Laney, Mr. Say Young Jo, Country Director Country Director PHILIPPINES Beijing Rm 301, 3rd Floor, Leema Mr. Teodoro M Cortes, Suite 902 China World Twr 2 Building Consultant No. 1 Jianguomenwai Avenue 146-1 Susong-dong, 1408-B, Robinsons-Equitable BEIJING 100004, PRC Chongro-ku Tower Phone: (8610) 6505-1830 Seoul 110-755 #4 ADB Avenue cor. Poveda, Fax: (8610) 6505-2201 KOREA Ortigas Ctr. 1605 Pasig City, Email: Phone: (822) 738-7056 Metro Manila Website: Fax: (822) 736-5501 PHILIPPINES Email: Phone: (632) 637 5387 Shanghai Website: Fax: (632) 637 5388 Rm. 1802, SITC Email: No. 2201 Yanan Xi Lu SHANGHAI, 200336, PRC Phone: (8621) 6219-1661 Fax: (8621) 6219-5590 Email:
  49. 49. TAIWAN WEST EUROPE & OTHER TURKEY & MIDDLE EAST Mr. Anthony Thang, Country AFRICAN COUNTRIES Mr. Christopher Andrew, Regional Director Director 6 Fl., No. 27, Chang An East MEXICO BJK Plaza, Suleyman Seba Cad. Road, Section 1, Taipei 104, Mr. Mark W. Andersen, No. 92 TAIWAN Regional Director A-Blok, Kat-8 No. 85/86 Phone: (8862) 2560-2927 Guadalajara World Trade Center 80680 Besiktas, Istanbul, TURKEY Fax: (8862) 2568-3869 Av. Mariano Otero No. 1249 Phone: (90 212) 258 2800 Email: Torre Pacifico Int. B171M Fax: (90 212) 236 2620 Website: Col. Rinconada del Bosque Email: Guadalajara, Jalisco MEXICO C.P. 44530 Phone: (52 33) 5000 0990 Fax: (52 33) 5000 0999 Email: 64 Website: