IADI: Grain Merchandising, Price Risk Management, and Grain Contracting Program

See http://www.informaecon.com/Canada/Canadian_Conference.asp to view brochure. Can also sign-up from this page.

Your profit margins depend crucially on how well you manage your costs of production and your revenues and the inherent time lag between cash outlays and inflows. Time lags of various lengths are a fact of life for everyone involved in the production, merchandising and processing/feeding of grain. 

Market prices of grain can change gut-wrenchingly fast, and if you have not done something to protect your margins, you can swiftly move from being in the black to being in the red. This training session will improve your risk management tools so that you sell/merchandise your grain with greater confidence.

As farmers, there are a number of things that can be done to control farm input costs. You likely need to commit to these costs well ahead of harvest even if they are being financed. You may have target profit margins in mind when determining planting intentions. By using futures and/or options in your marketing strategies, much of your targeted margin can be ensured well before planting, while maintaining flexibility in terms of cash contracting.

As grain merchants, particularly those exporting grain, you have to sell well forward of actual delivery of grain as well as originate grain using a mix of forward and spot cash contracts. While some sales can work well simply as back-to-back arrangements, there are many cases where using futures and/or options allow for better margins while reducing risk exposure. Futures and options also allow you to construct a broader array of contract types with confidence that will allow you to attract more bushels without exposing your operation to unacceptable risks.

Grain processors/crushers require raw materials on a consistent basis. Obtaining grain with a mixture of spot and forward arrivals requires you to manage gross margin so that price moves on grain or products do not bump you into the red. Futures and options on futures not only allow you to manage input prices, they can also help you to protect your margins from sudden price moves. 

Farmers (and other industry participants) note:
You may be eligible for a partial refund of the course fee as part of the Growing Forward 2 Program. Ensuring that you meet the criteria and claiming any refund is up to you, but we thought that you would appreciate knowing about this potential cost recovery. 

To be eligible for a refund, applicants must obtain approval from your provincial agriculture department before attending.

 

Participants will learn highly valued marketing skills that include:

  • BASIC UNDERSTANDING of merchandising and risk management skills
  • FUTURES MARKETS and the role of futures in hedging; the use of spreads
  • WHAT IS ‚ÄúTHE BASIS‚Äù and why this is important to your marketing efforts, with a focus
  • on Canadian specific basis issues
  • OPTIONS MARKETS and how those markets are used in price risk management strategies
  • HOW CASH AND DERIVATIVE MARKETS work and how those markets are used in
  • price risk management strategies
  • CASH MARKET CONTRACTING: Development of different types of contracts
  • GROSS MARGIN MANAGEMENT: Processing risk management

 

Our team to develop and deliver this program includes:

  • Rob Westmoreland, Executive Vice President, Informa Economics, Inc.
  • Nicholas Hoyt, Vice President, Informa Economics, Inc.
  • Chris Ferris, Senior Grains Analyst, Informa Economics, Inc. Winnipeg
  • Ms. Susan Sutherland, Senior Director, Agricultural Products, CME Group

These professionals have a combined experience of over 100 years operating in and analyzing grain and oilseed markets and risk management situations. They have conducted similar seminars all over the world and have provided risk management and merchandising training to hundreds of professionals.

 

Agenda:

7:00 - 8:00am         Continental Breakfast and Registration  

8:00 - 8:30am         Introduction and Overview  

8:30 - 9:00am         Markets and Hedging

9:00 - 10:00am       CME Group, Futures Market Overview 

10:00 - 10:15am     Beverage Break

10:15 - 11:00am     Options Market Overview

11:00 - 12:00 Noon Basis Concepts and Hedging Examples

12:00 - 1:00PM        Lunch

1:00 - 2:00PM          Applied Hedging Examples

2:00 - 3:00PM          Cash Contracting Methods: Pros and Cons of Different Methods

3:00 -3:30PM           Beverage Break

3:30 - 5:00PM          Case Studies

5:30 - 7:00PM          Cocktail Reception

Meals, Beverage Breaks Sponsored by Informa Economics and others

 

 

Program Fee is $750 + 5% GST.

 

For more information, please see: http://www.informaecon.com/Canada/Canadian_Conference.asp, or http://www.informaecon.com/Canada/IADICanadaBrochureDec14.pdf

English
Duration: 
Full day
Location: 
Sheraton Cavalier Hotel | 2620 32 Avenue NE | Calgary, AB | T1Y 6B8 Canada
Event Terms: 
Subject of Learning: 
Dates: 
Tuesday, December 2, 2014 - 21:00 to Wednesday, December 3, 2014 - 07:00
Cost: 
787.50