Crop Margin Management Seminar

CPE Credits: 12

Day 1 – Topics Covered

• Identifying Your Exposures
  We begin with an introduction to commodity price risk management, with a focus on the critical first step of building a risk model for your operation by using the futures market to project profit and loss.

• Understanding Your Market Risk
  Expanding on the concept of a sound risk model, we examine the components of total cash price risk (futures prices and local basis values) and discuss the value of managing each risk as discrete and independent.

• Contracting Alternatives: Tools to Manage Risk
  We lay out the full range of tools you can use to manage commodity price with an overview of cash contacts, an introduction to options, and a detailed discussion of futures.

• Applying Concepts Learned I
  A price management exercise tests your ability to use futures and a basic options strategy to establish and protect a price for a simulated crop operation through several decision periods.

Day 2 – Topics Covered

• Adding Flexibility with Options
  Following a review of the prior day’s content, we introduce more advanced option strategies and how each can be used to establish the precise risk/return balance that’s right for your operation. You learn how multiple option positions can protect against higher or lower prices, and how to select the right position(s) for your needs.

• Creating a Margin Management Policy
  Taking a step back from the tools and tactics of margin management, we highlight the value of a strategic approach and provide guidance on creating an objective framework to guide your future margin management decisions.

• Tailoring Your Strategy as Markets Change
  Using examples, we illustrate how an active approach to margin management can improve long-term outcomes. We explore why and how to make changes to an initial position to address risk or take advantage of opportunities to capture attractive margins as commodity prices change over time.

• Applying Concepts Learned II
  A second, more advanced exercise reinforces your understanding of how to initiate and adjust positions over a marketing period to achieve a margin objective. We conclude by evaluating the choices made at various decision points and the resulting effects on net margins.

Registration Details

Registration fee includes breakfast, lunch, a Tuesday evening cocktail reception and all seminar materials. For more information, please call 1.866.299.9333.

NASBA Continuing Education Credits

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