Commodity Price Risk Management

A seminar focused on helping commodity buyers reduce price risk while maximizing opportunity.

Topics include:

• Futures Market Fundamentals
  An introduction to the futures markets, including terminology and mechanics. We will explore the role of the clearing service provider, regulation of the futures industry and the importance of the margining system to the integrity of the exchange.

• Futures Pricing
  The relationship between commodity futures prices and the price on the cash (spot) market, and an introduction to commodity price management.

• Contracting Choices
  The obligations, benefits and other considerations of basis contracts and cash forward contracts, as well as the various alternatives to cash contracting, such as futures and options strategies.

• Managing Price Risk
  Using futures to hedge the risk of unfavorable movements in commodity prices. A group exercise will test participants’ ability to establish a price for a commodity.

• Managing Basis Risk
  Using futures spreads to manage the difference between cash and futures prices.

• Adding Flexibility with Options
  Using options to establish flexible pricing with a cost/benefit balance that matches the needs of a given operation. We will explore the factors that contribute to the cost (premium) of an option and look at strategies to minimize these costs.

• Selecting the Right Strategy for Your Needs
  A comparison of the impact on price from various option strategies alone and in combination. We will work through several examples to illustrate the development of a hedge position, and the process of managing those positions over time.

• Applying Concepts Learned
  An interactive price management simulation to reinforce and test new skills. Participants will make several price management decisions over a marketing period and evaluate the resulting effect on price.

Registration fee includes breakfast, lunch and an evening cocktail reception. For more information, please call 1.866.299.9333.

NASBA Continuing Education Credits

CPE Credits: 12

Commodity & Ingredient Hedging, LLC is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Web site: www.nasba.org

Learning Objective

Participants will be introduced to the mechanics of the futures and options markets and the terminology related to the futures industry. Participants will also learn how to utilize risk management strategies to manage commodity price risk.

Learning Level

Basic

Prerequisites

None.

Delivery Method

Live