Margin Management for Lenders

This program is designed to help credit analysts, loan officers and bank managers understand the risk management strategies of their agricultural producer clients.

CPE Credits: 16

Day One – Topics Covered

• Margin Management Fundamentals
  An introduction to modeling forward profitability in the agriculture industry. We will explore how producers can use the full range of contracting alternatives in both the cash and futures markets to secure favorable margins.

• Cash Market vs. Futures Market
  The risks and benefits of physical (spot) market contracts compared to exchange-traded contracts, and how the two types can complement each other.

• Margin Requirements and Projections
  Understanding performance bond requirements and their potential impacts on cash flow and credit lines.

• Hedging Relationships and Risks
  The requirements of the various parties involved in the hedging process, including futures commission merchant (FCM) clearing and account control agreements, trade execution and account funding.

• Position Reconciliation
  Matching open and closed position P&L to physical purchases and sales, and determining net exposure.

Day Two – Topics Covered

• Core Strategies
  Basic exchange-traded structures that complement existing physical contracts to manage the risk of both higher and lower prices.

• Managing Strategies Over Time
  Position adjustments that can help producers address risk and margin exposure, and take advantage of opportunities as prices change.

• 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 net margins.

Registration fee includes breakfasts, lunches, 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