Category Archives: Hedging and Risk Management

Fundamentals of Grain Hedging: Options

This article is the second post in a series titled, Fundamentals of Grain Hedging: Options. In this series, I discuss different types of hedge strategies that are used around the industry by grain producers and consumers. The focus of this article is grain hedging options. In subsequent posts I will discuss more complex structures such […]

Grain Hedging Strategies – Is It Better To be Lucky or Good?

Ashland Commodities

It is not uncommon to hear people in the hedging space to say things like, “even a blind squirrel finds a nut every now and then,” or “it’s better to be lucky than good.” The problem with those statements are that they are usually indicative of a lack of grain hedging strategies. You see, those […]

Fundamentals of Grain Hedging – Futures

This post is the start of a series discussing different grain hedging strategies that are utilized by grain producers and consumers.  In the grain markets, there are a number of different grain futures contracts. Most of these contracts are traded on a few exchanges and almost all the futures exchanges are owned by the Chicago […]

Grain Risk Management – Are You Hedging or Speculating

Even the best laid plans have the ability to go awry. This is especially true in commodity markets that are known to be volatile and have a history of taking no prisoners. That’s why it is critically important that every business has plans and processes in place to protect them against hedges going awry. Consider […]

Consumer Risk Management Theory

Successful commodity risk management at consumer-packaged goods companies (CPG) tends to focus primarily on protecting margin while removing volatility, providing margin recovery, and providing predictability to the business. The way that this is traditionally accomplished is to align the companies hedging strategies and tools with brand elasticities and market conditions. This allows organizations to repeatably […]

Systematic Approach to Risk Management

Ashland Commodities Risk Indicator

The problem with most risk management and hedging programs today is that there is a lack of a defined process. Too many producers and consumers are either trying to buy the absolute top/bottom, getting nervous and buying/selling on impulses, or simply buying to a budget.  From a risk management perspective, all of these strategies will […]

Grain Hedging: Producer Collar Hedge Strategy

Producer Collar hedge Strategy

As a producer of commodities, you understand how important it is to manage the risk of price fluctuations in your finished product. Everyday we work with, and talk to, grain and oilseed producers who are looking for cost effective ways to help manage this risk and ensure their profitability.  Unfortunately, there are still many people […]