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Abstract
Report Introduction: To find ways to improve Grain Market News reporting, the U.S. Department of Agriculture (USDA) recently conducted a study of cash grain pricing. The data were collected by the Statistical Reporting Service and analyzed by the Economic Research Service and the Agricultural Marketing Service. More than 2,600 grain handlers provided information for the study. This is a preliminary report to these cooperating firms, highlighting the major findings. A detailed report will be issued in 1977 to make the results fully available to the public. Two interrelated systems facilitate the flow of grain from farms to final users. The physical system provides conditioning, handling, storage, and transportation services. The exchange system establishes prices for grain bought and sold under diverse conditions with respect to quality and time and place of delivery. The exchange system consists of the cash market and the futures market. The futures market is highly visible; grain futures contracts are traded openly on the organized exchanges at Chicago, Minneapolis, and Kansas City; each price change is recorded and widely disseminated. However, most of the trades that result in actual physical delivery occur in the cash market. The cash market, unlike the futures market, is difficult to observe. It is primarily a telephone market involving large numbers of traders operating from their own offices. The study focused on the domestic cash market, looking at the types of traders involved, the nature of their transactions, and the flow of information among market participants.