The disruptions and extreme complexities of the commodity supply chain create great risk that needs to be managed, as well as equally great opportunities if prices move in a favorable direction. The interior (North America) agricultural commodity supply chain is heavily based on various events, such as weather impacting supply and transportation, scheduled/unscheduled maintenance of railroad tracks, and planned and required federal transportation restrictions. Global demand for agricultural commodities, the impact of regional weather, and economic and geopolitical events can also dictate interior transportation requirements. As with other commodities, transportation and storage costs can have an adverse impact on agricultural commodity prices. By responding quickly and efficiently to observed and expected changes in the supply chain, commodity market participants can optimize their business operations, reduce risk, and increase profit potential.
Traditional, disparate software systems are becoming insufficient in this complex business environment as they are not built to be responsive and adaptable to the ever-changing, highly-event-driven dynamics of the agricultural supply chain. Our market research indicates a complete software solution in addition to other external variables need to: account for the impact of storms or extended weather events on crop production and transportation; monitor crop condition; manage progress and storage data; track price movements in the cash and futures markets; and assess how global economic and geopolitical events are driving demand. They also must do so more quickly, on a single platform, and with an easy-to-use interface. In order to support demand in a rapidly-changing environment, software systems must be designed to provide Straight Through Processing (STP) capabilities and business process support for increased market visibility, reduced errors, and a more holistic view for market participants; not only manage risk, but to also capitalize on market movements.
Ray Asif
DTN
Trading and Risk Management Product Manger
