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Pioneer Hi-Bred launches U. S. hedging service

In a bid to extend its reach into the U. S. grain industry, DuPont said Nov. 13 it will launch an electronic instant hedging and cash grain commodity transaction service.

The “e-Pit” program, a joint project by DuPont’s Pioneer Hi-Bred business unit and Farms Technology LLC, partly owned by Pioneer, is aimed at speeding a process in which grain buyers hedge purchases with futures contracts, the companies said.

The companies said they were the first in the industry to provide the service. The move builds on the launch earlier this year of Pioneer’s “MarketPoint” website, where growers post grain for sale to local buyers. About 300,000 bushels have traded through the MarketPoint system so far, according to Pioneer manager Joe Foresman.

“The e-Pit program has the potential to save grain buyers time and money by eliminating a step in their grain-buying process,” said Foresman.

Through e-Pit, buyers can automatically purchase cash commodities from growers by instantly acquiring futures contracts to hedge cash contracts, officials said. The service protects the buyers’ margins and reduces or eliminates the risk of the physical delivery of a cash contract when there is no futures contract in place, they said.

Pioneer is not charging users for the service, which requires users to have a Pioneer customer number, but is hoping it can earn more farmer seed business, Foresman said.

The e-Pit program will go live Dec. 2, will initially be open to producers and buyers in the key corn-growing states of Iowa and Nebraska, and will expand as interest grows, said Foresman.

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