SOY IMPORTERS GUIDECopyright ©2005 American Soybean Association International Marketing Southeast Asia

All rights reserved. No part of this publication may be reproduced, stored in a retrieval systemor transmitted, in any form or by any means, electronic, mechanical, photocopying or otherwise,without the prior permission of the copyright owners.

M04GX19403–092005–0500

soy importers guide

American Soybean Association (ASA) International Marketing is anon-profit, single commodity organization working towards the promotion ofsoybeans as a viable crop. Its objective is to develop the market for soybeans whileensuring the ongoing demand from food and feed processors for this valuable rawmaterial. ASA also encourages the development and promotion of soy-basedproducts.

ASA’s members include farmers, soybean handlers, oilseed crushers, feedmanufacturers, seed suppliers, fertilizer and agricultural chemical organizations,government officials and related agencies. ASA works with the US Department ofAgriculture, Foreign Agriculture Service, United Soybean Board, and local groupsand individuals involved in the utilization, consumption and marketing of soybeansand soybean products.

Headquartered in St Louis, Missouri, the organization’s international marketingprogram, aimed at keeping soybean production profitable, extends to 8 offices,spanning more than 77 countries worldwide. In addition to promoting the use ofsoybeans 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 Asia541 Orchard Road#11-03 Liat TowersSingapore 238881Tel: (65) 6737 6233Fax: (65) 6737 5849Email: asaspore@pacific.net.sg

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History of the Soy Importers Program

Introduction to Soybeans

Quality Standards for US Soybeans and Soybean Products

Procuring Soybeans and Soybean Products

US Bulk Handling and Export System

Specialty / Identity Preserved Soybeans

Payment Options

Risk Management

Glossary

Useful Resources

Contents

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03

History of the Soy Importers Program

In 1997, the American Soybean Association (ASA) began a series of trade programsspecifically aimed at educating importers in Southeast Asia on the benefits ofimporting US soybeans and soy products. The program series served to empowerthem with information on how to be more effective in a highly competitive domesticand global business environment, so as to synchronize their existing technicalprograms with the fundamentals of the trade as part of the buying equation.

Hence, between 1997 and 1999, seminars that covered the commercial aspectsof the trade were conducted in the region under the Soy Importers Workshop andRisk 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 thesefluctuations

• present concepts and theories for managing commodity prices using futuresand options

• assist with the establishment of effective risk management to enable customersto have more direct control over their buying decision

• educate customers on the effectiveness of the US commodity handling systemand development of infrastructure from competing markets

• analyze global market forces and conditions affecting the freight industry; andother forces affecting the production and demand for US soybeans and soybeanmeal

• 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 theSouth American soybean market, global consumer acceptance of agriculturalbiotechnology, and erratic international economies, ASA forged ahead with thedevelopment of a more advanced program series. The new program is designed

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to equip customers with updated information and new technologies to ensurethat they understand the intrinsic value of using quality ingredients, and are ableto make sound decisions beyond price considerations to ensure profitability.

To take this concept further and customize it to address specific needs withinindividual companies, ASA currently conducts workshops under its PreferredCustomer Program. Through the in-house program, core decision makers of thecompany that include finance purchasing, logistics and nutrition managers areable to participate and benefit from this highly dynamic and hands-on computerbased program facilitated by ASA's technical personnel and consultants. The aimis to demonstrate that no departmental decision should be made in isolation, asbottomline profits depend on a cohesive buying strategy involving all departments.

About the Soy Importers Guide

The Soy Importers Guide serves as an easy reference tool to assist buyers andimporters with the import of soybeans, soybean meal, soybean oil and other soyproducts from the United States. The information contained provides a generaloverview of US soybean production and processing, quality standards andinspection, procurement, payment options, risk assessment tools, and usefulresources and web links.

The Soy Importers Guide is produced under the direction of the American SoybeanAssociation (ASA) International Marketing with funding from the United SoybeanBoard (USB). The United States is the world's premier producer and exporter ofsoybeans and ASA is proud to represent those interests from eight offices aroundthe world. This handbook is just one of the many importer services which ASAoffers consumers of US soybeans, and other soy products.

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Introductionto Soybeans

Introduction to Soybeans

Often referred to as the miracle crop, the soybean is the world’s leading providerof protein and oil. More soybeans are grown in the United States (US) than anywhereelse in the world. In 2004, US soybean farmers in over 31 states harvested 74million metric tons of soybeans. A 60-pound bushel of soybeans yields about 48pounds of protein-rich meal and 11 pounds of oil.

The primary use of whole soybeans and protein from soybean meal is to providea low-cost, high protein feed ingredient for fish, poultry, swine, cattle, and otheranimals. Other uses range from tofu and soy sauce, to soy flour used in bakedgoods and high fiber breads. In addition, the protein is used in industrial productssuch as plastics, wood adhesives, and textile fibers.

Soybean oil is the leading vegetable oil in the world. Uses of soybean oil rangefrom margarine to salad dressing and mayonnaise. Examples of industrial applicationsinclude the use of the oil as a carrier in inks and paints. Soybean oil also providesan environmentally friendly fuel for diesel engines.

Soybean Planting, Harvesting and Distribution

PlantingThe process begins in the field with the soybean seed planted in spring or earlysummer. Planting dates vary depending on the latitude and geographic region.Classification of soybean cultivars into maturity groups help US farmers choosecorrect varieties for their regions. Farmers may plant 6 to 10 different varieties ofsoybeans each growing season. Seeds develop in pods with each pod containing1-5 seeds, but the most common varieties contain 2-3 seeds per pod.

HarvestingSoybeans are considered dry mature when seed moisture reduces to less than 14%in the field. Harvesting date depends on the variety, growing regions, planting

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date, and local weather conditions. The most active harvest periods are during themonths of October and November. In the US, almost all soybeans are harvestedby combines. The seeds are threshed out from pods into a hopper and moved intoa 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 storagefacilities. Proper handling of the soybeans during harvest and storage is criticalto protect the beans from damage.

DistributionSoybeans are stored at farms, elevators, and processing plants in various typesof storage facilities before being channeled to the next destination. Local elevatorswill store and condition the soybeans before selling and shipping to a soybeanprocessor or export elevator. Farmers may also transport soybeans by truck to aregional transport facility such as a railroad or river terminal for shipment directlyto a grain buying station, processing plant, or harbor facility for shipment overseas.

Once the soybeans are sold to local, national or international processors, they arerefined into various products in many different countries. Soy processors convertsoybeans into products made from whole soybeans, such as tofu, tempeh, miso,natto, soy sauce, some soy flours, soy nuts, and soymilk. Other soybeans destinedfor more traditional food and technical products are graded, cleaned, dried, andcracked to remove the hull. Soybean hulls are further processed for animal feedor fiber additives for breads, cereals, and snacks.

Soybean Processing

Whole SoybeansWhole soybeans are the edible seeds of the soybean plant. They are high in proteinand contain beneficial phytochemicals, such as isoflavones. The mature soybeanis about 38% protein, 30% carbohydrate, 18% oil, and 14% moisture, ash, andhull. Whole soybeans can be cooked and used in sauces, stews, and soups. Wholesoybeans that have been soaked can be roasted for snacks.

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Soybean MealSoybean meal is a premium product because of its high digestibility, high energycontent and consistency. Over 80% of the soybean meal produced in the US isdehulled and processed in large state-of-the-art solvent extraction facilities. Highquality standards and an efficient production, handling and shipping industry inthe US ensure that export customers receive a consistent and high value product.Properly processed dehulled soybean meal is an excellent source of protein andis 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 pigstarter feeds. For young animals and birds, dehulled soybean meal is the preferredproduct.

Soybean OilSoybean oil is the world’s most widely used edible oil. In the United States, itaccounts for nearly 80% of edible oil consumption. Soybean oil’s 85% unsaturatedfat profile is among the lowest of the vegetable oils and contains 61% polyunsaturatedfat and 24% monounsaturated fat. Almost all margarine and shortenings containsoybean oil. It also is frequently found in mayonnaise, salad dressings, frozenfoods, imitation dairy and meat products and commercially baked goods. Soybeanoil has little flavor, which is an advantage because it does not interfere with thetaste of food.

Soybean oil is also used commercially in the manufacture of glycerin, paints, soaps,rubber substitutes, plastics, printing ink, and other products.

Soy ProteinIn 1999 the Food and Drug Administration (FDA) announced that foods containingsoy protein may reduce the risk of coronary heart disease (CHD). Foods that meetthe new FDA guidelines can now label their products with this claim. The soy healthclaim 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 heartdisease by reducing blood cholesterol levels.

Processed soybean protein products are divided into three categories based onprotein content: soy flour, concentrates, and isolates. Soy flour is made from roasted

12Oil Products

SOYBEAN’S MANY USESGlycerol

Fatty Acids

Sterols

Soybean LecithinRefined Soyoil

Edible UsesCoffee CreamersCooking OilsFilled MilksMargarineMayonnaisePharmaceuticalsSalad DressingsSalad OilsSandwich SpreadsShortenings

Technical UsesAnti-Corrosion AgentsAnti-Static AgentsCaulking CompoundsCore OilsDiesel FuelDisinfectantsDust Control AgentElectrical InsulationEpoxysFungicidesInk - PrintingLinoleum BackingMetal - Casting/WorkingOiled FabricsPaintsPesticidesPlasticizersProtective CoatingsPuttySoap/Shampoo/DetergentsVinyl PlasticsWallboardWaterproof Cement

Ediible UsesEmulysifying Agents

Bakery ProductsCandy/Chocolate CoatingsPharmaceuticals

Nutritional UsesDietaryMedical

Technical UsesAnti-Foam Agents

AlcoholYeast

Anti-Spattering AgentMargarine

Dispersing AgentsPaintInksInsecticidesRubber

Stabilizing AgentShortening

Wetting AgentsCalf Milk ReplacersCosmetics

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 aresimilar to soy flour except that the soybeans have been toasted and cracked intocoarse 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

Tofu Tempeh

Whole SoybeanProducts

Edible UsesSeedsStock FeedsSoy SproutsBaked SoybeansFull Fat Soy Flour

BreadCandyDoughnut MixFrozen DessertInstant Milk DrinksLow-Cost GruelsPancake FlourPan Grease ExtenderPie CrustSweet Goods

Roasted SoybeansCandies/ConfectionsCookie Ingredients/ToppingCrackersDietary ItemsFountain ToppingSoynut ButterSoy Coffee

Traditional SoyfoodsMisoSoymilkSoy SauceTofuTempeh

Soy Flour Concentrates & Isolates

Technical UsesAdhesivesAnalytical ReagentsAntibioticsAsphalt EmulsionsBinders-Wood/ResinCleansing MaterialsCosmeticsFermentation Aids/NutrientsFilms for PackagingInksLeather SubstitutesPaints - Water BasedParticle BoardsPlasticsPolyestersPharmaceuticalsPesticides/FungicidesTextiles

Edible UsesAlimentary PastesBaby FoodBakery IngredientsBeer & AleCandy ProductsCerealsDiet Food ProductsFood DrinksGritsHypo Allergenic MilkMeat ProductsNoodlesPrepared MixesSausage CasingsYeast

Soybean Protein Products

SoybeanMeal

Feed UsesAquacultureBee FoodsCalf Milk ReplacersCattle FeedsDairy FeedsFish FoodFox & Mink FeedsPet FoodsPoultry FeedsProtein ConcentratesSwine Feeds

HullsDairy FeeFilter MaterialHigh Fiber Breads

Source: American Soybean Association

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bean’s dietary fiber. When protein is removed from defatted flakes the result is soyprotein isolate, the most highly refined soy protein. Containing 90% protein, isolatespossess the greatest amount of protein of all soy products. They are a highlydigestible source of amino acids and because of the bland taste can be added tofood without jeopardizing its flavor or characteristics.

Soy Flour Soymilk

QualityStandards forUS Soybeansand Soybean

Products

Quality Standards for US Soybeans and Soybean Products

The US market for soybeans and soybean products is well established with qualitystandards specified by either government decree or industry adopted trading rules.In fact, they are governed by both contract specifications and a governmentregulated system of guidelines that control inspection, sampling, grading andweighing of grain and oilseeds. These standards and inspection procedures aredesigned to ensure a uniform product and to facilitate the efficient trading andmarketing of US grain and oilseeds. For soybeans, the bulk of these standards andinspection procedures are maintained by the Federal Grain Inspection Service(FGIS). For soybean products, they are established and maintained by the NationalOilseed Processors Association (NOPA). As a result of such an open system theUS has the ability to provide a wide array of quality of soybeans and soybeanproducts 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 StockyardsAdministration (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 consistentlydescribes 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 andmixed grain), rice, beans, peas and lentils

• inspects and weighs all exported grain, oilseed, and related products for domesticand export trade

• establishes testing methods and procedures, and approved equipment or officialinspection and weighing of grain

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• provides a national inspection and weighing system that applies the officialgrading and testing standards and procedures in a uniform, accurate, andimpartial manner

• monitors certain grain handling practices to prevent the deceptive use of gradingstandards and official inspection and weighing results, and the degradation ofgrain quality through the introduction of foreign material, dockage, or othernongrain material to grain.

US Grains Standards Act (USGSA)USGSA provides for the establishment of official US grain standards that are usedto measure and describe the physical and biological properties of the grain at thetime of inspection. The grades, classes and conditions reported on official certificatesare determined according to the factors defined in these standards. These factorsmay include test weight per bushel and percentages, by weight, of damagedkernels, foreign material, broken kernels and other factors. The certificate alsonotes specific conditions of the grain such as moisture content and infestation. Noseasonal adjustments are made on US grades.

Official US Standards

FGIS and Basic Grading DefinitionsFGIS defines US soybean as any grain that consists of 50% or more of whole orbroken soybeans that will not pass through an 8/64 round hole sieve and not morethan 10.0% of other grains for which standards have been established under theUSGSA.

There are two classes for soybeans: yellow soybeans and mixed soybeans. Yellowsoybeans are soybeans that have yellow or green seed coats and which in theircross section are yellow or have a yellow tinge, and may include not more than10.0% of soybeans of other colors. Mixed soybeans are simply those that do notmeet the requirements of the class of yellow soybeans.

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Foreign Material 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, orotherwise materially damaged. Stinkbug-stung kernels are considered damagedkernels 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 andall matter other than soybeans remaining in the sieved sample after sieving accordingto procedures prescribed in FGIS instructions.

Heat damaged kernels are soybeans and pieces of soybeans that are materiallydiscolored and damaged by heat. Soybeans that have green, black, brown, orbicolored seed coats are classified as soybeans of other colors. Soybeans that havegreen seed coats will also be green in cross-sections of these other colored soybeans.Bicolored soybeans will have seed coats of two colors, one of which is brown orblack 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 arenot damaged.

A couple of special grades and special grade requirements are garlicky soybeansand purpled mottled or stained soybeans. Garlicky soybeans are those that containfive or more green garlic bulblets or an equivalent of dry or partly dry bulblet ina 1,000 gram portion. Purple mottled or stained soybeans are those with pink orpurple seed coats as determined on a portion of approximately 400 grams withthe use of an FGIS Interpretive Line Photograph.

Other Grading Quality FactorsInterpretive factors can be used under FGIS rule so that visual grading aids assistinspectors in making subjective grading decisions and to reduce inter-marketdifferences in inspection results. This consists of Interpretive Line Slides and Interpretive

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Overtoasted SBM Pelleted Soyhulls

Line Prints. The Interpretive Line Slide system consists of a portable tabletop viewerand photographic slide transparencies. The Interpretive Line Print and Slides arephotographs and slides that exhibit particular attributes to allow a more uniformapplication of the general appearance factors and to aid an inspector in makinggrading decisions.

For more information on FGIS and Basic Grading Specifications visit:www.usda.gov/gipsa/index.html

NOPA and Basic Grading DefinitionsNOPA is essentially an industrial association that has its own grading requirementsand definition of their terms and guidelines. NOPA grading rules serve to regulatethe trade of the two major processed forms of soybeans, soybean meal and soybeanoil. The rules serve as a guide only for transactions. Parties to such transactionsare free to adopt, modify, or disregard NOPA rules.

Soybean MealNOPA 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 bypressure or solvents from soybeans.

Soybean meal is ground soybean cake, ground soybean chips, or ground soybeanflakes.

Soybean mill feed is the by-product resulting from the manufacture of soybeanflour or grits and is composed of soybean hulls and the offal from the tail of themill. A typical analysis is 13% crude protein and 32% crude fiber, and 13% moisture.

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Soybean mill run is defined as the product resulting from the manufacture ofdehulled soybean meal and is composed of soybean hulls and such bean meatsthat adhere to the hull in normal milling operations. A typical analysis is 11% crudeprotein 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 ofthe 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 solventextracted soybean meal are produced by cracking, heating, and flaking dehulledsoybeans and reducing the oil content of the conditioned flakes by the use of hexaneor homologous hydrocarbon solvents.

Soybean OilNOPA defines the standard of quality for soybean oil as a designated type of puresoybean oil of fair average quality based on the season's production. This mustconform to standard specifications of the Association, and be made part of NOPAtrading rules and which are subject to modification from time to time as conditionsmay warrant and upon the recommendation of the technical committee.

The Association defines the types of crude soybean oil and says that edible crudesoybean oil is any of the following: expeller pressed; expeller pressed degummed;hydraulic pressed; hydraulic pressed degummed; solvent extracted; solvent extracteddegummed; or mixtures of any of the above types.

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The primary traded soybean oil in the US is crude degummed soybean oil. It isdefined as the product resulting from removal of phosphatides from crude soybeanoil, and should contain no more than 0.02% of phosphorous as determined by theAmerican 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 ofthe 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• 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:www.nopa.org

ProcuringSoybeans

and SoybeanProducts

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 promotionand expansion US soybean and soy product exports. The Chicago Board of Tradefutures, storage, handling and transportation costs, insurance premiums, profitmargins, etc., subject to supply and demand forces, determine the internationalmarket price for soybeans and soybean meal at a particular time and place. TheUnited States is one of the world’s largest producers of soybeans (40%) and soybeanmeal (27%).

World Soybean Production 2004/05■ United States 40%■ Brazil 24%■ China 8%■ Argentina 18%■ European Union 2%■ India 2.5%■ Others 5%

World Soybean Meal Production 2004/05■ United States 27%■ Brazil 16%■ China 17%■ Argentina 16%■ European Union 9%■ India 3%■ Others 9%

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For market and trade data updates, visit www.fas.usda.gov/currwmt.asp

Identifying SuppliersThere are many sources an importer can access to locate the names of potentialsoybean and soy product exporters. The following groups will assist importers withcontact names of interested suppliers.

American Soybean AssociationASA is a private, non-profit organization with the goal of developing and expandingexport markets for US soybeans and soybean products. Headquartered in St. Louis,Missouri, ASA maintains offices in eight countries. The regional office located inSingapore can assist importers in the Southeast Asian region with the search forUS suppliers. For further information contact: ASA International Marketing SoutheastAsia, 541 Orchard Road, #11-03 Liat Towers, Singapore 238881, Tel: (65) 67376233, Fax: (65) 6737 5849, Email: asaspore@pacific.net.sg Website:www.asasea.com

North American Export Grain Association (NAEGA)NAEGA is a trade association whose members include many private companiesand cooperatives that handle a large percentage of US soybean product exports.Located in Washington, DC NAEGA provides importers with names of interestedsuppliers 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 OfficesIn most US Embassies around the world, you can find an agricultural attachè (orcommercial officer), representing the Foreign Agricultural Service (FAS) of the USDepartment of Agriculture (USDA). The agricultural attaches can offer local importersa 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 thebranch office of a US based commercial bank for a list of potential suppliers.

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Purchase Contract

Once a potential supplier(s) of US soybeans (or products) is identified, the importershould determine how offers will be evaluated. The importer can choose betweena 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 thevast majority of the contractual details encountered in normal transactions. Thesestandard contract forms for FOB transactions are under NAEGA No.2, FOSFA(Federation of Oils, Seeds, and Fats Association Limited) 3, and GAFTA 119 (forsoybean meal). For CIF contracts, GAFTA (Grain and Feed Trade Association) 27or 30 and FOSFA 54 are the general contract forms, and importers should makethemselves very familiar with these various documents.

For more information, visit www.asasoya.org/import/points.htm

Points to Consider Before a Purchase Contract is InitiatedFor the buyer of US soybeans or soybean products, there are several factors thatmust be considered before a purchase contract can be initiated.

Type of buyer(examples: merchandising company,broker, feed manufacturer, industrial

further processor, governmentbuying agency, etc.)

Quality and specificationsdesired (be specific)

Contact Information(name/title/business/country/address/phone/fax/e-mail)

Shipment details(FOB, CIF, port of shipment/

destination, etc.)

Date bids due and delivery(shipment) period

Financing/credit considerations(examples: user of US government credit

programs, private financing, specificfinancial needs)

US and internationalbank references

Quantity(specific metric ton requirement)

US BulkHandling

and ExportSystem

US Bulk Handling and Export System

The United States has the most extensive and efficient system of capital assetsdevoted to the handling and processing of grain and oilseeds in the world. Thecombination of private initiative and capital investment has exploited modest publicinvestments in infrastructure and regulation to create a system of unique transportationand handling alternatives where competition has driven down the costs of gettingAmerica’s agricultural products to the consumer.

Shipping and HandlingEquipped with one of the most modern port systems in the world, the US canefficiently deliver shipments of soybeans and soybean meal from virtually everymajor coastal outlet in the country. Large export orders travel by barge down theMississippi River system, and are loaded into large ships leaving from New Orleans.

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ColumbiaSeattle •

Snake

Missouri

North Platte

Platte

Wisconsin

IllinoisArkansas

CanadianRed

Mississippi

Alabarna

Chattahooche

Tennessee

Ohio

Hudson

PacificNorthwest

U.S. GULF

Portland •Grays Harbor •

•New Orleans

• Mobile

• Norfolk

• Major U.S. Ports

Major river systems in the U.S.The Mississippi is the nation’s most important waterway.

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Alternatively, shipments to Asia can also be executed off the Pacific Northwestwhere, similar to the US Gulf, cargoes can be loaded into various sized vesselsin single or multiple commodity shipments. Soybean meal may also be exportedfrom 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 theUS, commands a fleet of over 11,500 hopper-covered barges, towed by 2,000towboats that ply the river with bulk cargo. Another fleet of tank barges caters toviscous cargoes, such as soybean oil. There are nearly 6,000 miles of navigableroutes in the Mississippi River Basin including the Mississippi, Missouri, Ohio,Illinois, Arkansas, Tennessee, White, Cumberland, Alabama and Minnesota rivers.Through this system, river transportation reaches every major soybean producingstate 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 rangesto destinations in Asia, offering a much shorter distance from the Pacific Northwestto Asian destinations, and correspondingly cheaper ocean freight. The port facilitiesare just as efficient as those found in the US Gulf.

The Great LakesThe rising popularity of the Mississippi River barge system has seen a slip in theimportance of the Great Lakes despite its unique inland waterway. The St LawrenceSeaway provides access to the Lakes’ ports that connects Lake Superior, Lake Huron,Lake Erie and Lake Ontario. Following the completion of the Seaway, a separateclass of vessels was specially built – with the specific intention of plying the watersof the Great Lakes.

Specialty /Identity

PreservedSoybeans

Specialty / Identity Preserved Soybeans

Food beans have been selected and bred over the past several decades for making intovarious types of soyfoods for direct human consumption. They are called specialty oridentity-preserved (IP) soybeans, and usually carry a premium price in the market.Production for this category of soybeans requires a uniform and uncontaminated supplyof 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 controlledsystem of identity preservation.

Handling Process for IP Soybeans

35Contract

Growers produce IP cropson an individual contractbasis. Farmers and buyerscontract well in advance ofplanting for a specific varietyat a specific premium.

Farm

Specific varieties are grownunder contract, harvestedand stored separately on thefarm. Buyers often providethe seed.

Bagging for Transport

Farmers transfer crops tobags or sealed containers,main ta in ing separa tedistribution lines for specificvarieties.

Elevator

IP varieties are graded andhandled using specialprocedures. They are storedin separate bins, containersor silos.

Delivery to Port

IP crops are loaded intocontainers or dedicatedbarges carrying limitedcargo, or otherwise shippedby railroad.

Ships

The IP shipments are loadedonto container ships intos e p a r a t e h o l d s o rcompartments and storedcompletely separated fromother shipments during thetrans-oceanic trip.

Port of Discharge

On arrival, the shipments areunloaded using a dedicatedsystem and stored separatelyfrom other shipments.

Transport

Distribution to overseascustomers from the entry portus carried out using coastalvessel, barge, truck orrailroad – maintainingseparation from other cropsthroughout.

Storage at Processors

The IP deliveries are storedin separate dedicatedstorage.

Processing

Specific varieties areprocessed using separatebatch runs or lines forhigh-value products.

PaymentOptions

Payment Options

Of critical importance to any international commodity transaction is the determinationof how the payment for goods will be handled. This is often the first question askedof a potential importer by an exporter of US soybeans and/or its products. Theability of a potential importer to address this issue early in the commodity procurementprocess will not only reduce the time necessary to complete negotiations but helpthe importer arrive at a more favorable price as well.

Payment options vary in cost to the importer and/or exporter and degree of riskexposure, both in terms of monetary exposure and performance risk. In examiningthe various payment options, the importer should always bear in mind that locallaws and regulations may influence both these factors.

The importance of food relations between importers and exporters is critical to thesuccess of domestic and international trade and should not be hampered by poorcommunication and lack of effective follow-up. It is important to view each tradewith a long-term outlook, and build enough flexibility in all aspects of operationsto ensure successful trading.

39Letter of Credit (LC)The Letter of Credit (LC) is the most common payment standard for theinternational grain trade. The LC should set a time limit for completion andspecify the exact documents necessary to fulfill the terms of credit. A commonpayment term required by many exporters is for the LC to be advised to andconfirmed by a “first class US or Western European bank acceptable to theseller.”

Key points of the Export Credit Guarantee Programs:

• The GSM-102 and GSM-103 are administered through the CommodityCredit Corporation (CCC), a division of the USDA.

• The CCC provides a partial guarantee on the foreign credit risk posed toUS financing banks (98% of the FOB value of the export). On an exceptionbasis, 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 10years, but is generally granted to 7 years.

• The GSM guarantee allows US banks to offer low interest rates andextended loan tenors to foreign banks which may in turn, extendedfavorable terms to their importer clients.

• GSM funding is structured as bank-to-bank refinancing of a letter ofcredit; the letter of credit is issued by the importers bank and refinancedby the US bank. The importer’s bank has discretion to extend the GSMfinancing 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 underGSM. The program announcement for each country or region lists theapproved products.

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USDA Export Credit Guarantee ProgramsThe United States government, through the United States Department of Agriculture(USDA), in recognizing the need to minimize payment risks to exporters andfacilitate US grain, soybean and soy product exports annually establishes andfunds export credit guarantee programs. The two largest programs, the ExportGuarantee Credit Program (GSM-102), and the Intermediate Export GuaranteeProgram (GSM-103) provide financing for over 5 billion US dollars of US agriculturalexports.

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For the latest and complete details regarding these programs, please visitthe USDA website at http://www.fas.usda.gov/excredits/default.htm

Twelve steps to participating in the Supplier Credit GuaranteeProgram:

• The exporter must qualify as a program participant.• 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.

Another of these programs is the Supplier Credit Guarantee Program (SCGP). TheSCGP is unlike any other credit guarantee or insurance program in the world. Itis designed to make it easier for exporters to sell US food products overseas byinsuring short-term, open account financing. Under the security of the SCGP, USexporters become more competitive by extending longer credit terms or increasingthe amount of credit available to foreign buyers without increasing financial risk.Foreign buyers benefit because they can increase their purchasing power andprofit opportunities, and gain significant cash flow management advantages.

RiskManagement

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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 thecyclical nature of the growing season, manifesting themselves most obviously inprice risk. While there are many risks associated with a business dealing in soybeanssuch as transaction risk, execution risk, production risk, and systemic risk – it isprice risk that offers the most visible threat to a firm’s economic health.

Soybean and soy product importers first need mechanisms to help them discovermarket 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 pricerisk between the time of transaction and the actual delivery of the goods if theyare, like most of us, risk averse; the most common mechanism or tool being theforward 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 ofTrade.

Common Risk Management Tools

Forward Cash ContractA forward cash contract can be an effective method of risk management for soybeancomplex market participants. The purchase or sale of the physical commodity inthe cash market for delivery at a specified later date is the most common form ofcash trade. The forward cash contract involves a direct relationship between twoindividual parties, each of whom acts as his or her own guarantor. The majorattraction of the forward cash market is that the buyer or seller who needs tomanage price risk can secure a transaction that eliminates exactly that price riskfrom which he is seeking relief. Depending on the liquidity of trade, the governingrules of trade and the availability of quality trading partners, the forward cashmarkets are an effective and efficient tool for managing price risk.

Exchange Traded FuturesThe first risk management tool grain producers and consumers may use to minimizerisk is the exchange traded futures contract. At futures exchanges such as theChicago Board of Trade (CBOT), futures contracts are traded between marketparticipants. A futures contract is an agreement to purchase or sell a commodityfor 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 byeither the delivery of the standardized quantity and quality of the commodity, orby offset.

Exchange Traded OptionAt futures exchanges across the globe, another form of risk management hasdeveloped over the last 25 years. The exchange traded option on a futures contractis a unilateral contract which gives the buyer the right to buy or sell a specifiedquantity of a commodity at a specific price within a specified period of time,regardless of the market price of that commodity. Exchange traded options activelytrade at the futures exchanges in the US and abroad and they are an integral partof many feedgrain risk management programs.

Over the Counter (OTC) SwapA relatively new risk management tool available to soy complex market participantsis the over the counter or OTC swap, derivative and trade option market. A swapis a forward contract with the price typically fixed at inception against an underlyingindex or indices. Settlement can be agreed on the basis of the value of that indexor those indices at any single point in the future, but is usually the basis of anaverage of values over a pre-determined period of time. A swap does not generallyconvey the right or obligation for physical delivery.

DerivativesDerivatives 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, theterm derivative is distinguished from other forms of risk management first accordingto whether their primary use is for shifting market risk and, second, in that theyincorporate characteristics of two or more of the other tools discussed earlier.

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Trade OptionsA 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 exchangetraded options in the cash markets. A trade option is generally an OTC contractbetween commercial interests that would give the buyer the right to purchase ordeliver grain against a set price and time period.

For more information on soy visit http://www.asasea.com/soyi.html orhttp://www.cftc.gov/opa/brochures/opaeconpurp.htm

Glossary

Advice of fate Importer’s bank notificationand confirmation to seller’s bank that thedraft and documents have either beenaccepted or rejected under the collectionsmethod of financing grain purchases.

Amino Acids Chief components anddeterminants of the characteristics of aprotein; the building blocks of living tissues.Eighteen different amino acids commonlyoccur in our food supply and eight areconsidered essential because the body cannotmake them.

Basis The difference between the cashprice for a commodity delivered and thefutures price for any given contract monthof the same, or different, commodity. Whenthe cash price is below the futures price, thebasis is negative; when above the futuresprice, the basis is positive. The basis isdetermined by traders of grain. Thepredictability of the basis is very importantto the hedger.

Bear One who is bearish or believes themarket will trade lower.

Bear spread A short spread in the futuresor cash markets. A trader buys futures orcash for the more distant period and sellsthe futures or cash of a nearby period whichhe believes overvalued. The trader profitswhen the spread widens.

Bearish Any factor affecting the marketthat causes it to go down.

Bill of Lading Document that conveys thetitle to the goods; a contract by a carrier fordelivery of the goods; and a receipt for themerchandise being shipped. The bill of ladingmay be issued as either straight (non-negotiable) or to order (negotiable).

Bleaching Treatment of a fat or oil witha material such as activated charcoal ordiatomaceous (Fullers) earth which removesor reduces the amount of coloring materialsnormally present in a refined oil. Thebleaching process may be carried to thedegree desired depending upon the colorrequired by the eventual usage of theprocessed oil.

Bull One who is bullish or believes themarket will trade higher.

Bull spread The simultaneous purchaseof futures or cash in a nearby period andthe sale of like futures or cash in a deferredperiod. The trader profits when the spreadnarrows.

Bullish Any factor affecting the market,causing it to trade higher.

Carrying charges The difference in pricebetween one period to another, carryingcharges can be positive or negative. Whenthey are positive the market is said to be “ata carry”; when they are negative “in aninverse.”

Cash basis The basis of a physicalcommodity in a given market; i.e. “the cashbasis for Toledo corn.”

Cash grain The physical commodities,the definition encompasses all or any markets.

Cash market A market in which buyersand sel lers purchase/sell physicalcommodities. This can refer to a specificplace, but it can also refer to the transactionsthemselves and need not be confined to anyone place.

Cash position A trading position in aphysical commodity.

Cash price The price of the physicalcommodity.

Confirming bank The financial institutionthat confirms payment against presentationof negotiated documents; preferably a firstclass US bank.

Cooking oil A refined, bleached, anddeodorized oil which has not been furtherprocessed to remove the higher melting pointportions of the oil. Cooking oils tend tocrystallize or set up semi-solid at temperaturesmuch below about 70˚F. For this reason,heating coils should be installed in storagetanks for cooking oils in contrast to saladoils where no heating coils are usuallynecessary.

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Glossary

Cracking The breaking of the whole seedinto several pieces to facilitate dehulling andflaking.

Crude soy oil Sometimes referred to ascrude raw soybean oil; the unrefined oilproduced by any one of the proceduresdescribed for the extraction of oil fromsoybeans. It is customary to filter the oiland/or allow it to settle after being processedfrom the soybeans as required by thestandard trade specifications. Crude soy oilis a mixture of triglycerides composed ofunsaturated fatty acids (oleic, linoleic,linolenic) and saturated fatty acids, togetherwith usually not more than 1.5% of free fattyacids and from 1.8% to 3.2% ofphospholipids, depending on the qualityand kind of soybeans and the procedureused in processing.

Dead weight The vessel’s total carryingcapacity, i.e. cargo plus fuel and water andconstant (crew, machinery, spare parts, etc).Dead weight cargo capacity is what remainsafter deducting fuel and water, etc. as abovefor total dead weight.

Defatted soy flour Flour produced bythe nearly complete removal of the oil fromsoybeans by the use of hexane or otherhomologous hydrocarbon solvents; usuallycontains about 1% fat.

Degummed soy oil Sometimes referredto as crude degummed soy oil; the productresulting from washing crude soy oil withwater and/or steam or another degummingagent for a specified period of time and thenseparating the oil-and-water mixture, usuallyby centrifugation, to remove the phos-phatides. It shall not contain more than0.02% of phosphorus without a discountpenalty.

Degumming The removal of phospholipidsfrom vegetable oil by a water washing step.

Delivery When ownership of a givenfutures contract is switched into ownershipof the actual cash underlying the given futurescontract during its expiration period.

Delivery markets Commodity futuresexchanges which provide for making cash

commodity deliveries on futures contractsupon their maturity.

Delivery period The time period withinwhich a buyer will provide a vessel to receivedelivery on FOB contracts.

Delivery points Those locations andfacilities designated by a commodityexchange where stocks of a commodity maybe delivered in fulfillment of a futures saleaccording to exchange rules.

Deodorizing A process involving use ofhigh vacuum and superheated steam inwashing of fats and oils. Deodorizationremoves from fats and oils materials originallypresent or introduced during previousprocessing which would contributeobjectionable flavors and odors to thefinished product.

Derivative A risk-sharing instrument thathas the force of a binding contract andderived from an underlying cash market.Forward contracts, futures, options on futuresare all derivatives. In colloquial usederivatives often referred to a subset of thisgroup and defined to be products that havecharacteristics of both swaps and optionsand do not trade on an exchange.

Diglyceride A chemical combination offatty acids and glycerin in the proportion oftwo fatty acid units to one glycerin unit. Adiglyceride may result from the combinationof the units or by splitting off one fatty acidunit from a triglyceride during fat breakdownor hydrolysis.

Draft A negotiable instrument containingan order to pay. A draft can be drawnpayable upon demand (sight/demand draft)or time. Also known as a bill of exchange.

Edible crude soy oil Soy oil which shallbe of any of the following designated typesproduced from mature yellow soybeans:(1) expeller pressed, (2) expeller presseddegummed, (3) hydraulic pressed,(4) hydraulic pressed degummed, (5) solventextracted, (6) solvent extracted degummed,and (7) mixtures of any of the above-described types. When the oil is producedby solvent extraction, the name of the solventused in the process must be given.

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Edible refined soy oil Crude ordegummed soy oil which has been subjectedto special refining processes to adapt itspecifically for use in food products. Inaddition to treatment with alkali, bleaching,partial hydrogenation, the oils may be alsowinterized. These oils are further classifiedas salad oils, cooking oils, or shortening.

Elevator convenience Elevators generallyload vessels of the same commodity in theorder in which they have filed notice ofreadiness (NOR.) However, it would not beunusual to load a soybean vessel with a laterfiling date before a corn vessel with anearlier filing of NOR. This would be elevatorconvenience. However, the charterer’s agentshould investigate if a vessel of the samecommodity with a later filing date is loadedin front of one with an earlier filing date.

Expeller Equipment for expressing oilfrom oil seeds, consisting of an augur movingthrough a slotted barrel through which oilcan drain. Also called a continuous screwpress.

Extruder A jacketed augur used as aneconomical cooker and as a means oftexturizing soy flours or concentrates. Canalso be used to treat oilseed flakes beforesolvent extraction.

Extrusion A process for texturizing soyflours or other proteins using high pressuresand temperatures in an extruder.

Fully refined soy oil The edible oilproduced from crude or degummed soy oilwhich has been treated with dilute alkalisolution (caustic refining) or neutralization,treated with absorbent clay materials(bleaching) and subjected to steam distillationat high temperatures under vacuum(deodorizing). Such oil may also be producedby a process called physical (steam) refiningwhich consists of degumming, bleachingand neutralization by final step ofdeodorizing.

Fumigation Application of a pesticide orchemical to a cargo in order to rid the cargoof insects. The most common type of fumigantis phosphine gas, which is applied, in severaldifferent methods, to grain while in the

elevator or vessel or barge. Fumigant, whichcan be toxic, should be handled by a firmlicensed by the government.

Fundamental analysis A three-stagestudy of the actual supply and demandconditions in order to make price and pricetrend analysis.

Futures account An account openedwith a broker to buy and/or sellercommodities on the futures exchanges.

Gumming Formation and accumulationof a fat insoluble sticky material resultingfrom continued heating of fats and oils. Thegummy material is produced by oxidationand polymerization of the fat and representsfat breakdown products which collect onheating surfaces.

Hedging Shifting the price risk to reduceor remove any unforeseen price movementsin the future. The risk is shifted to those whoare willing to take on the risk in hopes ofmaking a profit (speculators).

High-fat soy flour Flour produced byadding back soy oil and/or lecithin todefatted soy flour to a specified level, usuallyin the range of 15%.

Hydrogenated soy oil During theprocess of hydrogenation, the soy oil isexposed to hydrogen gas in the presenceof heat and a catalyst (nickel, copperchromite) and the hydrogen combines withcertain of the chemical components(unsaturated fatty acids) of the triglycerideswith a resultant increase in the melting pointof the oil; sometimes referred to as‘hardening.’

Hydrogenation The process of chemicallyadding hydrogen in the presence of a catalystto the unsaturated, ‘hydrogen short’ portionsof a natural fat. The addition of hydrogenreduces the reactivity of the fat toward oxygenand thus stabilizes and retards ranciditydevelopment in the fat. Hydrogenationusually raises the melting point of a fat orchanges it from a liquid oil to a solid fat.

Hydrolyzed soy protein Made fromsoybean flours, concentrates or isolates,

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treated with an acid or a base or an enzymeand then dried.

Irrevocable, confirmed documentaryletter of credit payable at sight Letterof credit which may be canceled only withthe agreement of the issuing bank, confirmingbank and the seller. It specifies the documentswhich must be presented under the letter ofcredit. The holder (beneficiary) will be paidwhen the documents specified in the L/Care presented to the bank.

Isolated soy protein Protein which hasbeen greatly concentrated and removedfrom its native location by chemical ormechanical means. It is generally producedby extracting protein from white flakes orflour with water or a mild alkali. Isolatesusually have a protein content of at least90%.

Kibbled soybean meal The productobtained by cooking ground solvent extractedsoybean meal, under pressure and extrudingfrom an expeller or other mechanical pressuredevice. It must be designated and soldaccording to its protein content and shallcontain not more than 7% crude fiber.

Loading berth line-up When the vesselarrives in port and has received its loadingpasses, it is entered into the line-up of vesselsin order to take its turn in the loading berth.

Loading charges The price incurred forthe loading of cargo. The charges varydepending on the kind of vessel specified,the port visited, and the time spent at berth.

Long position The position of buying acash commodity or futures contract withouthaving offset that position.

Margin Deposits posted by all futuresbuyers or sellers to the brokers handlingtheir accounts, guaranteeing that thebuyer/seller will meet his obligation.

Market order When a buyer/seller onthe futures market informs his broker toperform a transaction at the market price.

Meat extenders Use of soy or othervegetable proteins as partial substitutes for

meat in processed items such as patties,chilli, casseroles, etc.

Melting point Usually the temperatureat which a natural or processed fat becomesperfectly clear and liquid or at which a discof the fat assumes a spherical shape underprescribed conditions of raising thetemperature of the fat sample. The greaterthe degree of unsaturation the lower themelting point. Hydrogenation raises themelting point.

Positions (long or short) Marketcommitments. A trader whose purchasesexceed his sales is said to be long or to havea long position. One whose sales exceedpurchases is said to be short or have a shortposition.

Pre-advice The buyer must provide to theseller the name of the vessel, its date ofreadiness at load port, and the capacity ofthe vessel prior to the minimum number ofdays specified in the contract. Ample timemust be given for the seller to have the cargoavailable for prompt loading.

Price discovery The process by whichthe futures and cash markets allow bothbuyers and sellers to find out price at a givenmoment.

Prime US bank First class U.S. bank.

Refining Treatment of a natural orprocessed fat to remove impurities. Refiningis accomplished by treatment of the fat withcaustic soda, centrifuging, washing withwater and centrifuging gain. The separatedrefined fat or oil id dried by heating undervacuum.

Remittance taxes Taxes paid fortransferring foreign currency in and out ofa country for international transactions.

Resistance area The point above whichprices have not risen in the recent past.Indicates that prices should not go abovethe area in (at least) the near future and thatit may be a good level to test the short sideof the market.

Riders Contract extension clauses whichare attached to standard contracts.

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Salad oil A refined, bleached anddeodorized edible oil which has beensubmitted to a chilling process beforepackaging. The chilling causes solidificationof the higher melting point portions of thefat and permits removal of this materialwhich would otherwise solidify and cloudin packaged oil stored at lower climatictemperatures. A good salad oil will have ahigh Cold Test, i.e. will withstand holdingfor many hours at 32˚F before showing anysigns of clouding. Some oils are naturalsalad oils and do not require winterization.

Service and facility charge Chargedby export facilities, primarily on the USPacific northwest range, to vessels loadingat their berths.

Shipment periods Under a CIF or C&Fcontract, the time period within which thegrain must be shipped. By ‘shipped’, themarket, and most contracts which governthese shipments, means the date of the bill(s)of lading.

Shipped weight The weight of the grainthat is shipped; determined by/under thesupervision of FGIS or a state weighingagency. Shipped weight is almost alwaysthe weight that governs. The weight certificateis final.

Short position The position of selling scash commodity or futures contract withouthaving offset the position with a purchaseof equal size.

Shortening A plastic or semi-solid fatused in the production of bread, cakes andother bakery products. It is also used forfrying as it becomes liquid when heatedmuch above 100˚F. It derived its name fromits effect in making the baked product shortor tender.

Soy flour and/or grits The ground,screened, graded product obtained afterextracting most of the oil from selected,sound, clean, dehulled soybeans. They areproduced from grinding the defatted soyflakes. Grits are courser ground than soyflour. Protein range is 40% to 60%. It mustcontain not more than 4.0% crude fiber.

Soy protein concentrate Preparedfrom high quality sound, clean, dehulledsoybean seeds by removing most of the oiland water soluble non-protein constituentsand must contain not less than 65% proteinon a moisture-free basis.

Soy protein isolates The major protein-aceous fraction of the soybeans preparedfrom dehulled soybeans by removing themajority of non-protein components andmust contain not less than 90% protein ona moisture-free basis.

Soya As with the term soybeans, soyadescribes a legume, the botanical name ofwhich is Glycine max (L) Merrill. Also, soyacan be used when describing the entireplant, crop or category of products derivedfrom soybeans. Differentiated from the termsoybeans which can be used to describe theactual seed of soya. Internationallyacceptable.

Soybeans A legume, the botanical nameof which is Glycine max (L) Merrill; a summerannual varying in height from less than afoot to more than 6 feet and in habit ofgrowth from stiffly erect to prostate; thecultivated plant may reach a height of 3 feetor more. The seeds (soybeans) are borne inpods that grow in cluster of three to five witheach pod usually containing two or threemore seeds. The oil content of the soybeanvaries from 13% to 26% (average 18% to22%) and from 38% to 45% protein (on amoisture-free basis.) Soybeans were grownfor centuries in the Orient and first introducedto the United States early in the 19th century.Soybeans grow best in areas having hot,damp summer weather but they can begrown under a great variety of climaticconditions.

Soybean cake Product resulting fromthe extraction of part or all of the oil bypressure or solvents from soybeans, soldaccording to its protein content and furtherdescribed by its process of manufacture.

Soybean extraction/processing Theprocedures involved in the separation of theoil and the protein meal; also called ‘crushers’or oil mill operations. There are two typesof processes presently used in the United

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States for this purpose: (1) Solvent extraction:the process whereby the oil is leached orwashed (extracted) from flaked soybeansby the use of commercial hexane as thesolvent. The level of oil in the extracted flakescan be reduced to 1% or less by thisprocessing method. The products resultingfrom the use of this process are designatedin the trade as ‘solvent extracted,’ e.g.‘Solvent extracted soybean meal,’ ‘dehulledsolvent extracted soybean meal,’ ‘solventextracted soy grits,’ ‘solvent extracted soyflour.’ Practically all soybeans processed inthe United States are processed by the solventextraction system. (2) Continuous pressing:a continuous pressing process, at elevatedtemperatures, using expellers or screwpresses which utilize a worm shaftcontinuously rotating within a pressingcylinder or cage to express the oil fromsoybeans after they have been ground andproperly conditioned. The oil content of theresulting press cake is reduced to from 4%to 6% by this processing method. Althoughtechnically incorrect, the products resultingfrom this type of processing are often referredto as ‘expeller,’ e.g. ‘expeller soybean meal.’

Soybean lecithin The mixed phospholipidsproduct obtained from soy oil by thedegumming process, contains lecithin,cephalin and inositol phosphatides, togetherwith glycerides of soy oil and traces oftocopherols, glucosides and pigments. It isdesignated and sold according toconventional descriptive grades with respectto consistency and bleaching. The dehydratedemulsion of mixed phosphatides and soy oilis further processed to produce thecommercial grades which may be describedas follows: plastic or firm consistency; softconsistency; fluid; unbleached; bleached;and double bleached. High qualitycommercial lecithin contains 60% to 65%phosphatides.

Soybean meal Ground soybean cake,ground soybean chips or ground soybeanflakes, sold according to its protein contentand further described by its process ofmanufacture. Typical composition: protein44.0% minimum, fat 0.5% minimum, fiber7% minimum, and moisture 12.0% maximum.

Soybean meal, dehulled, solventextracted Obtained by grinding the flakesremaining after removal of most of the oilfrom dehulled soybeans by a solventextraction process. It must contain not morethan 3.5% crude fiber.

Soybean meal , mechanicalextracted The product obtained bygrinding the cake or chips which remainafter removal of most of the oil from soybeansby a mechanical extraction process. It mustcontain not more than 7% crude fiber.

Soybean meal, solvent extractedThe product obtained by grinding the flakeswhich remain after removal of most of theoil from soybeans by a solvent extractionprocess. It must contain not more than 7.0%crude fiber.

Soybean mill feed Composed of soybeanhulls and the offal from the tail of the millwhich results from the manufacture of soygrits or flour. It must contain not less than13% crude protein and not more than 35%crude fiber.

Soybean mill run Composed of soybeanhulls and such bean meats that adhere tothe hulls which results from normal millingoperations in the production of dehulledsoybean meal.

Soybean processor An individual, ora group of two or more individuals workingtogether as a company or firm, whoseprimary business is the separation of the oiland meal in soybeans. The activities of aprocessor may also include refining and/ordistribution of the oil as well as distributionor further production with soybean meal orsoybean protein.

Soybean protein product, chemicallymodified A soybean product that hasbeen processed to primarily modify thenatural protein structure by utilizing acids,alkalis or other chemicals without removingsignificant amounts of any nutrient constituent.

Soybean seed coats (hulls) Soybeanhulls consist primarily of the outer coveringof the soybean.

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Soyfoods Term for edible (primarily forhuman consumption) soy-based products.These include traditional soyfoods such astofu, soymilk, tempeh, soy sauce etc: soyprotein products produced after processing(as described above) such as soy flour, soyconcentrates and isolated soy proteins: soyoil products such as refined soy oil,hydrogenated soybean oil and soybeanlecithin: and other edible buy-products suchas soybean hulls and soy fiber. Also, ‘secondgeneration’ soyfoods, a term to describeconsumer oriented products that use asoyfood as a primary ingredient, such astofu or soymilk-based nondairy frozendesserts or tofu-stuffed ravioli.

Soymilk A protein-rich, milk-like liquidtypically obtained from the soaking andgrinding of whole soybeans with water; or,hydrating whole, full-fat soy flour; cookingthe resultant slurry, and filtering all or partof the soy pulp or fiber from the cookedliquid. Modern systems for soymilkproduction may vary in technique. Soymilkprepared in this manner can be used tomake tofu, drunk as is, spray-dried orsweetened and flavored as a beverage.

Spinning A process for texturizing soyprotein isolate by forcing a concentratedsolution of protein through a small openinginto a coagulating bath.

Spreads The price difference betweenfutures months or between markets or relatedcommodities. Spreads help reduce pricerisks. Most often used to describe a futuresposition in which the trader is long onecontract month of a given commodity andshort another month of the same commodity.

Stevedoring The job involving the stowingand trimming of the vessel. Most vesselcharters are FIOST, which means that thecharterers arrange stevedoring. Since manyelevators use in-house stevedores, it ischeaper for the importer (charterer) to buygrain under a contract which includes stowingand trimming.

Support area Tthe point below whichprices have not dropped during declines inthe recent past. The support line, which canbe drawn horizontally or at an angle, tellsthe trader that prices are not likely to gobelow this support in the near future.

Swap A forward contract, priced basis anegotiated index or indices, that does notinclude physical delivery.

Technical analysis The study of themarket to predict future price movements onthe basis of past price movements.

Toasting The term commonly buterroneously applied to the processes (moist)of cooking soybean meal, flour or grits byatmospheric or pressure methods for thepurpose of increasing the protein efficiencyof these soy products or improving theirfunctional properties and/or improvingphysical texture.

Trimmed cargo Cargo is manually ormechanically moved to the edges of theholds for safe stowage to reduce any risk ofshifting during the voyage. Ordinary vesselsrequire cargo to be trimmed.

Unsaturation A term descriptive of thecarbon-hydrogen make-up of a materialsuch as fat or oil. The term refers specificallyto a shortage of hydrogen atoms in the oilsstructure. The less hydrogen, the greater thedegree of unsaturation and the greater thereactivity with oxygen. Unsaturation in a fator oil means easier formation of peroxides,easier development of rancidity and moretendency to polymerize. Highly unsaturatedfats are usually oils, and solid fats havelower unsaturation.

Volatility A measure of the stability of aprice series; the speed at which pricechanges.

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UsefulResources

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Soy Related Organizations

Federal Grain Inspection Service (FGIS),GIPSA, USDAStop 36011400 Independence Avenue, SWWashington, DC 20250-3601Tel: 202-720-5091Fax: 202-205-9237Website: www.usda.gov/gipsa/index.html

North American Export GrainAssociation (NAEGA)1250 I Street, NWSuite 1003Washington, DC 20005Tel: 202-682-4030Fax: 202-682-4033Website: www.naega.org

The Grain and Feed Trade Association(GAFTA)GAFTA House6 Chapel PlaceRivington Street, London EC2A 3SHTel: 44-20-7814 9666Fax: 44-20-7814 8383Website: www.gafta.com

National Oilseed Processors Association1300 L Street, NWSuite 1020Washington, DC 20005-4168Tel: 202-842-0463Fax: 202-842-9126Website: www.nopa.org

Federation of Oil, Seeds and FatsAssociation (FOSFA) International20 St Dunstan’s HillLondon EC3R 8HLUnited KingdomTel: 44-71-283 5511/2707Fax: 44-71-623-1310

Chicago Board of Trade (CBOT)141 W Jackson BlvdChicago, IL 60604-2994Tel: 312-341-7955Fax: 312-341-3027Website: www.cbot.com

Commodities Futures TradingCommission (CFTC)2033 K Street, NWWashington, DC 20581USATel: 202-254-6387Fax: 202-254-3061

National Futures Association (NFA)200 West Madison StreetSuite 1600Chicago, IL 60606-3447USATel: 312-781-1300Fax: 312-781-1467Website: www.nfa.futures.org

Major US Soy Exporters

Ag Processing Inc12700 W. Dodge Rd.P.O. Box 2047Omaha, NE 68103-2047Tel: 402-496-7809Email: info@agp.comInternet: www.agp.com

Archer Daniels Midland CompanyP.O. Box 1470Decatur, IL 62525Tel: 217-424-5200Email: info@admworld.comInternet: www.admworld.com

Bunge North America IncP.O. Box 2850011720 Borman DriveSt. Louis, MO 63146Tel: 314-292-2000Fax: 314-292-2110Internet: www.bungenorthamerica.com/home.htm

Cargill, IncP.O. Box 9300Minneapolis, MN 55440-9300Tel: 952-742-7575Internet: www.cargill.com

CGB Enterprises, Inc1-800-669-0085 ext 229Email: barrettb@cgb.comInternet: www.cgb.com

62Useful Web Linkss

www.agbios.com Agbios (Biotechnology)www.aocs.org American Oil Chemists’ Society (AOCS)www.soygrowers.org American Soybean Associationwww.bio.org Biotechnology Industry Organizationwww.uscafta.org CAFTA-DR Information Websitewww.cbot.com Chicago Board of Tradewww.feedstuffs.com Feedstuffswww.usda.gov/gipsa Grain Inspection, Packers and Stockyards Administration (GIPSA)www.ilcfar.org Illinois Council on Food Agricultural Research (C-FAR)www.iasc-oils.org International Association of Seed Crusherswww.biodiesel.org National Biodiesel Boardwww.niop.org National Institute of Oilseed Productswww.nopa.org National Oilseed Processors Associationwww.soyink.com National Soy Ink Information Centerwww.talksoy.com Soy and Healthwww.soyatech.com Soya Oilseed Bluebookwww.soyatrade.com Soyatradewww.soymeal.org Soybean Meal Information Centerwww.soyfoods.org Soyfoods Association of North Americawww.soystats.com Soystatswww.stratsoy.uiuc.edu Stratsoywww.iseo.org The Institute of Shortening and Edible Oilswww.unitedsoybean.org United Soybean Boardwww.fas.usda.gov US FAS Trade Offices (worldwide)

Louis Dreyfus Corporation20 Westport RoadWilton, Connecticut 06897-0810Tel: 203-761-2285Fax: 203 761-2375Email: footea@louisdreyfus.comInternet: www.louisdreyfus.com

Owensboro Grain719 E. Second St., P.O. Box 1787Owensboro, KY 42302-1787Phone: 270-926-2032Fax: 270-686-6509Email: ogcogeo@aol.comInternet: www.owensborograin.com

The Scoular Company250 Marquette AveSuite 1050Minneapolis, MN 55401Tel: 612-8513756Internet: www.scoular.com

For more information, contactasaspore@pacific.net.sg or visithttp://www.asasea.com/links.html

ASA INTERNATIONALMARKETING OFFICES

SOUTHEAST ASIAMr. John A Lindblom,Regional Director541 Orchard Road#11-03 Liat TowersREPUBLIC OF SINGAPORE238881Phone: (65) 6737-6233Fax: (65) 6737-5849Email: asaspore@pacific.net.sgWebsite: www.asasea.com

INDONESIAMr. Ali Basry, ConsultantWisma Mitra Sunter, #402Blok C-2 Boulevar Mitra SunterJl Yos Sudarso Kav. 89Jakarta 14350INDONESIAPhone: (6221) 651 4752Fax: (6221) 651 4753Email: asagrain@indosat.net.id

PHILIPPINESMr. Teodoro M Cortes,Consultant1408-B, Robinsons-EquitableTower#4 ADB Avenue cor. Poveda,Ortigas Ctr. 1605 Pasig City,Metro ManilaPHILIPPINESPhone: (632) 637 5387Fax: (632) 637 5388Email: asatcj@mozcom.com

THAILANDMr. Opas Supamornpun,Consultant59/43 Baan Klang MuangLadprao 71 RoadLadprao, Bangkok 10230THAILANDPhone: (662) 5395373,5395332Fax: (662) 539 5256Email: asathai@loxinfo.co.th

VIETNAMMr. Tran Trong Chien,Consultant13/F Hanoi Towers49 Hai Ba Trung StreetHanoi, VIETNAMPhone: (844) 934 3979Fax: (844) 934 3966Email: asa-usgc@fpt.vn

PEOPLE’S REPUBLICOF CHINAMr. Phillip Laney,Country DirectorBeijing

Suite 902 China World Twr 2No. 1 Jianguomenwai AvenueBEIJING 100004, PRCPhone: (8610) 6505-1830Fax: (8610) 6505-2201Email: beisoya@asachina.orgWebsite: www.asachina.org

Shanghai

Rm. 1802, SITCNo. 2201 Yanan Xi LuSHANGHAI, 200336, PRCPhone: (8621) 6219-1661Fax: (8621) 6219-5590Email: shasoya@asachina.org

ASIA SUBCONTINENTMr. Virgil Miedema,Regional Director149 Jor BaghNew Delhi – 110 003INDIAPhone: (91 11) 2465-1659Fax: (91 11) 2465-1526Email: asaasc@vsnl.netWebsite: www.asaasc.com

JAPANMr. Takehiko Nishio,Country Director4th Fl. KY Tameike Bldg.1-6-19 AkasakaMinato-ku, Tokyo 107-0052JAPANPhone: (81 3) 5563-1414Fax: (81 3) 5563-1415Email: asatokyo@gol.comWebsite: www.asajapan.org

KOREAMr. Say Young Jo,Country DirectorRm 301, 3rd Floor, LeemaBuilding146-1 Susong-dong,Chongro-kuSeoul 110-755KOREAPhone: (822) 738-7056Fax: (822) 736-5501Email: soyakor@kornet.netWebsite: www.asa.or.kr

ASA INTERNATIONAL MARKETING12125 Woodcrest Executive Drive

Suite 140 St. LouisMO 63141-5829, USA

Tel: (1314) 985-0988 Toll Free: 800-408-4993Fax: (1314) 754-1351

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TAIWANMr. Anthony Thang, CountryDirector6 Fl., No. 27, Chang An EastRoad, Section 1, Taipei 104,TAIWANPhone: (8862) 2560-2927Fax: (8862) 2568-3869Email: asatwn@ms75.hinet.netWebsite: www.soybean.org.tw

WEST EUROPE & OTHERAFRICAN COUNTRIES

MEXICOMr. Mark W. Andersen,Regional DirectorGuadalajara World Trade CenterAv. Mariano Otero No. 1249Torre Pacifico Int. B171MCol. Rinconada del BosqueGuadalajara, JaliscoMEXICO C.P. 44530Phone: (52 33) 5000 0990Fax: (52 33) 5000 0999Email: asamex@soyamex.com.mxWebsite: www.soyamex.com.mx

TURKEY & MIDDLE EASTMr. Christopher Andrew, RegionalDirectorBJK Plaza, Suleyman Seba Cad.No. 92A-Blok, Kat-8 No. 85/8680680 Besiktas, Istanbul, TURKEYPhone: (90 212) 258 2800Fax: (90 212) 236 2620Email: asatr@superonline.com

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