Exploring Spot Contracts in SAP Agricultural Contract Management

The agricultural origination business operates in a dynamic environment where contracts need to be easily created using both manual and automated methods. Additionally, the pricing of these contracts should be automated based on specific criteria. SAP Agricultural Contract Management has been enhanced to offer more options for spot contract creation and increased flexibility in creating accumulate-to-own contracts.

The spot features in SAP Agricultural Contract Management leverage templates for contract creation, introducing a streamlined template determination process within the system. Furthermore, SAP Agricultural Contract Management provides the capability to restrict the usage of certain materials or commodity families in spot processes, allowing for better control and customization.

In a spot scenario, a farmer who does not have an existing contract with an agricultural company wishes to sell a portion of their stock. They initiate the creation of a contract based on the prevailing market rate (spot price) for that day. Alternatively, it could involve a situation where a farmer has stored their stock in a company's elevator and decides at a later stage to sell it at the current market or at spot rate without an existing contract in place. This is called purchase from commingled. Spot purchase from commingled can also happen between two agricultural companies, instead of a farmer and an agricultural company who manages the elevator.

It is worth noting that even if the farmer has regular contracts in place, they may choose to sell on a spot basis if the market price significantly exceeds the contracted price and they can still meet their delivery obligations for the existing contracts. This type of spot sale allows them to bypass their existing contracts and sell at the spot rate.

To facilitate the spot contract creation process, it is essential to have a template contract available as a reference. The selection of the appropriate template contract is determined through a predefined table that undergoes a meticulous determination process. This template selection mechanism is employed for end-of-day spot types, accumulate-to-own spot types, as well as immediate spot types.

The determination of criteria for selecting the appropriate template contract is facilitated by a table within the system. This table allows for flexible and precise criteria definition based on various factors. Let's explore the key determinants:

1. Plant TSW Location: The selection criteria can be defined based on a specific plant Traders and Scheduler’s Workbench (TSW) location. This provides the option to be highly specific in template assignment or to utilize a location hierarchy for a more generalized approach.
2. Material or Commodity: The determination logic allows for template selection based on a specific material or a broader commodity category. This enables customization based on the type of product being traded, such as soybeans or other commodities.
3. Mode of Transport: The template determination process also considers the mode of transport. This criterion allows for differentiation based on the method by which the goods are transported, offering flexibility in template assignment.

In addition to the above determinants, there are two additional possibilities that can influence template selection by using default templates. You have the option to flag specific templates as default for end-of-day spot contracts and accumulate-to-own contracts. This designation ensures that these templates are automatically assigned when applicable, streamlining the contract creation process.

Furthermore, there are BAdIs (Business Add-Ins) available to validate template data upon saving the master data. The BAdI named /ACCGO/BADI_SPOT_CONTRACT serves this purpose. It can also be utilized if multiple templates are determined for an application document, allowing for additional validation and customization.

By utilizing this table and the associated BAdI, the system ensures that the appropriate template is selected based on specific criteria, ensuring accuracy and consistency in spot contract creation

There is also a transaction code available to define logic for excluding specific material locations or commodities and locations from spot contracts. The transaction code is /ACCGO/EXCL_SPOT - Maintain Material/Commodity and Location Invalid for Spot.

This transaction allows you to specify invalid combinations, either based on material location or commodity and location. When a combination is marked as invalid, a spot contract will not be created for that scenario.

SAP Agricultural Contract Management now provides more options to create contracts with increased flexibility - both manually and automated. Spot immediate is created by a user.

Spot immediate enables the following:

• Templates can be selected by the user within the application work center.
• Pricing can be entered directly into the application work center and passed to the contract that will be created.
• DPQS simulation can be used to determine the LAQ quantity of the application documents selected. This ensures the contract is created for the correct quantity.
• Multiple application documents can be selected for spot processing at a time.
• Valid for Purchase Application Documents (PADs), Sales Application Documents (SADs) and Commingled Application Documents (CADs). Note that PADs and CADs cannot currently be selected for the same spot contracting process.

SAP Agricultural Contract Management offers enhanced contract creation options with increased flexibility, catering to both manual and automated processes. Two notable contract types that are automatically generated by the system are Spot End-of-Day (EOD) and Accumulate-to-Own contracts. These contracts are associated with relevant application documents, ensuring a streamlined workflow.

When there is a need to utilize the spot end-of-day rate for all the loads received on a given day, the Spot EOD functionality comes into play. Here are some key aspects of Spot EOD:

• Spot EOD contracts utilize templates that are determined through the template master data.
• Application documents can be marked for EOD either by specifying application instruction 23 or through the Manual Application Workcenter (MAW).
• The pricing of Spot EOD contracts is automated and based on the close price entered in the DCS, with the spot price type serving as the basis.
• To ensure accurate contract creation, a DPQS is employed. This simulation determines the LAQ of the selected application documents, aligning it with the correct quantity.
• Spot EOD contracts are applicable to both PADs and Commingled Application Documents CADs.
• Grouping criteria, including plant, vendor, mode of transport, template, and template line item, are utilized to effectively to manage multiple application documents and loads.

In practical terms, to designate specific loads for end-of-day processing, you can indicate the relevant application instruction during Load Data Capture (LDC). This instruction acts as an explicit instruction for the Spot EOD process. Alternatively, unassigned loads or commingled loads that are not yet associated with a contract can be triggered for end-of-day processing through the MAW.

The automatic pricing of Spot EOD contracts is based on the close rate entered in the DCS, which is where feature prices are configured. The spot price type, specifically configured for the basis, is utilized in this pricing calculation. Additionally, the DPQS simulation, either based on a default schedule or specified in the template, determines the logistically adjusted quantity of the selected application documents.

Spot EOD contracts cater to various types of application documents, including purchase application documents and commingled application documents, providing flexibility for different transaction scenarios. Effective grouping criteria based on plant, vendor, mode of transport, and template, along with the determination of template line items, ensures efficient management and organization of multiple application documents and loads.

To create these contracts, there is a dedicated monitor transaction that you can utilize. Within this transaction, you would provide the necessary header information. It is important to specify the particular spot scenario you are referring to, such as the Spot End-of-Day.

When selecting the Spot End-of-Day scenario, you have the option to determine the price date to be used for selecting the price. By default, it is set to the current day, but you can override it with a different date if needed.

To ensure accuracy and assess the potential outcomes, there is a simulation capability available. This allows you to simulate the transaction and review the results before committing and creating the actual contracts.

It is worth noting that if the closing price cannot be determined, no contracts will be created. Additionally, there is a BRFplus rule that aids in determining the appropriate contract type to be used. In the absence of this specific rule, the default logic will refer to the SAP Agricultural Contract Management contract type table, which is a configuration table.