The amount of on-farm storage does not create a concern IMHO because in the end someone has to market/export the grain and if it is GNC that does it, then GNC gets it's cut. It is the margin that determines GNC take on a trade.
I am not a grain trader and am not in the market to buy grain wholesale but if people want to chase grain at lower prices direct from the farmer then platforms already exist to do that. From where I sit that is small fry. There is a cost saving (labour) by going to a large grain and saying give me volume x of this quality and the trader can put that together and deliver it. In applications where quality parameters are critical cutting out the trader is a risk because what the farmer says is in the silo may not quite be the case and the cost of sorting out a minor quality variation to meet specs could, I imagine, be a real pain in the arse.
In many parts of the ag sector there is still a lot of value in talking to someone at the other end to make sure you are getting what you think you are getting and in a timely manner. Just look at the volume sold on Auctions Plus v the saleyards and direct to processors. AP is gaining ground but a lot still go through the traditional networks.
GNC Price at posting:
$4.35 Sentiment: Hold Disclosure: Held
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