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 […]
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 […]
If you’ve been following the grain markets for the last year or two, you’ve definitely seen that they’ve been on a wide ride. On August of 2020, the nearby active corn contract opened at $3.15/bu. Almost a year and a half later in April of 2022, the nearby active corn contract opened at $7.48/bu – […]
If you’re new to futures markets, or only look at a few futures markets, you may find yourself a bitconfused by the meaning of things like ZCZ3, or ZWH3. Those symbols are called Futures Contract Codes. Each of these codes is a unique identifier and represent the commodity being traded, the deliverymonth of the contract, […]
Since commodities are all derived from some natural resource, it is important to understand those natural resources, their production practices, and the underlying market conditions. Without a firm understanding of these underlying principles, it is very hard to have a firm understanding of what is driving the markets. In the grain and oilseed market primer, […]