Course 11 of 20 · Agricultural Commodities Desk Academy

Grain Futures & Physical Hedging

Stage C, Merchandising and grain risk. Level 5 of 10.

Hedge execution and maintenance against a physical book: contract and month selection, hedge ratio, roll mechanics, margin management, and measurement of hedge effectiveness and residual basis risk.

130 chapters · 12 modules · every chapter one 8 to 10 minute explainer · builds on: Course 04, Course 07, Course 10

Enrol or enquire See the 130 chapters
How a chapter is delivered

One chapter is one idea taken to the point of use

Each chapter covers one idea to the point where you can use it, and comes two ways: a narrated explainer, and a deep dive audio discussion of around thirty minutes that works the same material at depth.

Self-paced throughout, and the same chapters can be taught as a cohort. Chapters run in order: each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

12 modules · 130 chapters

Open any module for its full chapter list, in teaching order.

M0 The Price Risk Standing Inside a Grain Position Ch 1-11
  1. The Board Price and the Basis Inside One Elevator Bid
  2. The Merchant Holding Unsold Bushels in a Country Elevator
  3. The Merchant Sold to a Mill Before the Wheat Is Bought
  4. Counting the Bushels That Carry No Agreed Price Yet
  5. When Grain Price Risk Attaches at the Scale Ticket
  6. Equal Bushels In and Out That Still Leave the Desk Exposed
  7. Two Grains, Two Boards, One Position Report
  8. One Board Move Against a Season of Posted Bid Margin
  9. Whose Seat the Hedge Order Is Placed From
  10. Threads Handed to the Basis, Delivery and Option Desks
  11. The Sequence a Grain Hedger Works Through
M1 The Grain Contract Read From the Live Specification Ch 12-23
  1. Where a Grain Contract's Terms Are Actually Set
  2. The Bushel Lot and the Farm Loads Behind It
  3. What One Cent Is Worth Across a Station's Whole Holding
  4. Deliverable Grades and the Discounts Applied at Tender
  5. Delivery by Shipping Certificate and Why a Hedger Reads It
  6. Why Corn, Soybeans and Wheat Do Not Share a Month Cycle
  7. The Expiry Clock on Three Grain Contracts at Once
  8. Daily Price Limits and the Session Cover Could Not Reach
  9. How a Grain Settlement Price Is Formed
  10. Speculative Position Limits on United States Grain Futures
  11. Why a Grain Hedger Almost Never Tenders
  12. An Exchange Notice That Lands While Cover Is Open
M2 The Unpriced Bushel Figure Ch 24-34
  1. One Exposure Sheet Built From Twenty Country Stations
  2. Tonnes on the Export Sale, Bushels on the Board
  3. Wet Bushels, Shrunk Bushels and the Figure to Hedge
  4. Dockage and Foreign Material in the Quantity That Reaches the Sheet
  5. The Last Nine Hundred Bushels a Station Cannot Hedge
  6. When Two Stations' Positions May Be Offset and When Not
  7. Sizing Cover Against a Quantity Still Growing in the Field
  8. Grain Held in Store for Others and Whose Exposure It Is
  9. A Worked Count, Part One: Scale Tickets and the Delayed Price Ledger
  10. A Worked Count, Part Two: From Gross Weights to Whole Lots
  11. Four Ways a Bushel Count Goes Wrong at a Scale House
M3 Direction and Size on a Grain Book Ch 35-46
  1. What Share of a Cash Bid Move the Board Actually Carries
  2. The Equal Bushel Default and the Three Conditions Behind It
  3. Bushels in the Bin Are Protected by a Short Board Position
  4. A Fixed Price Owed to a Processor Is Protected by Going Long
  5. Marking Every Line of a Station Report Long or Short
  6. Doubling Up: Lots Placed the Same Way as the Bushels
  7. The Three Sentences Spoken Before a Grain Order Goes In
  8. When the Ratio Departs From One: Grain Sorghum Against Corn
  9. A Ratio Fitted on Years That Included a Drought
  10. Hedging More Bushels Than the Bins Actually Hold
  11. Covering Half the Wheat and Writing Down Why
  12. A Worked Sizing Across Three Grains at One Station
M4 Which Contract Covers This Grain Ch 47-56
  1. Contract Selection Posed Before Any Order Is Written
  2. Hard Red Winter Wheat and the Board Nearest to It
  3. Soft Red Winter Wheat Covered on Its Own Contract
  4. Hard Red Spring Wheat and a Contract Listed Elsewhere
  5. Covering Barley, Rye and Millet With No Usable Contract
  6. European Origin Grain and a Board Quoted in Another Currency
  7. Covering on the Wrong Class and What It Leaves Standing
  8. Choosing Between Two Contracts for One Wheat Parcel, Worked
  9. Depth and Clearing Access as Selection Constraints
  10. The Line Between Covering a Wheat Class and Trading It
M5 Which Listed Month Carries the Cover Ch 57-66
  1. The Month That Prices Nearest the Day the Bushels Fix
  2. A Station Loading Weekly Against a Contract Listing Five Months
  3. Cover That Spans the Boundary Between Two Crops
  4. The New Crop Contract as the Reference a Forward Bid Is Built On
  5. Hedging a Mill Sale Priced on an Average of Daily Settlements
  6. Laying Cover Across the Pricing Window Day by Day
  7. Pricing Days With No Board Settlement Behind Them
  8. A Rail Programme Straddling Two Futures Months
  9. Putting a Number on Cover Sitting in the Wrong Month
  10. A Year of Month Choices for a River Terminal
M6 Getting the Order Done on a Grain Board Ch 67-76
  1. The Order Template a Grain Desk Fills In
  2. Choosing Between a Market Order and a Resting Bid at Harvest
  3. Hedging on the Close Because the Farmer Was Paid on It
  4. Working a Large Order Through a Thin Deferred Month
  5. Which Account the Station's Lots Actually Sit In
  6. What Getting Covered Costs in Cents per Bushel
  7. Tagging Each Lot to a Bin, a Ticket or a Forward Sale
  8. The Overnight File That Proves the Station Is Covered
  9. Breaks Between the Position File and the Broker Statement
  10. Covering at the Scale While Harvest Runs
M7 Keeping Cover Alive Past Expiry Ch 77-88
  1. Grain Held Longer Than Any One Contract Trades
  2. Closing the Near Month and Opening the Far One Without a Gap
  3. A Short Hedge Rolled Into a Deferred Premium Collects the Spread
  4. An Inverted Old Crop Market Charges the Short Hedge to Roll
  5. What the Same Two Curves Do to a Long Hedge
  6. The Last Day a Hedger Can Roll Without Taking Delivery
  7. Rolling From an Old Crop Month Into the First New Crop One
  8. Rolling Only the Part of the Position That Still Needs Cover
  9. Execution Quality in the Week Everybody Rolls at Once
  10. The Afternoon the Station Was Flat and Nobody Knew
  11. Moving a Futures Position Is Not Deciding to Store
  12. Reporting What the Roll Earned Apart From the Grain
M8 Correcting and Releasing Cover Ch 89-98
  1. Resizing After the Final Scale Weights Come In
  2. Cover Left Over When a Railcar Is Turned Away
  3. Taking Lots Off as Each Tranche of Bushels Prices
  4. Releasing Lots Before the Farmer Has Priced
  5. A Barge Loading Window That Moved and a Hedge That Did Not
  6. Lots Still Open After the Farm Contract Was Cancelled
  7. The Same Load Hedged by the Station and by Head Office
  8. Half Priced, Half Covered, and the Entry That Says So
  9. Closing Cover to Meet a Margin Call
  10. One Rail Programme Hedged From Purchase to Final Invoice
M9 Margin as Part of Hedge Maintenance Ch 99-107
  1. The Deposit Required Before a Single Lot Can Be Held
  2. A Week of Settlement Moves Against a Short Corn Position
  3. The Paper Loss That Proves the Hedge Is Working
  4. The Paper Gain That Hides a Falling Inventory Value
  5. Cash Out Every Session, Cash In Once a Month
  6. Forecasting the Worst Margin Week of a Crop Year
  7. Spread Credits and What the Clearing House Recognises
  8. A Note the Credit Officer Can Read Beside the Receipt
  9. One Statement Showing Bins, Lots and the Net
M10 Measuring What Is Still Open Ch 108-118
  1. The Four Things Still Open After the Board Is Covered
  2. The Basis the Hedge Hands Back Untouched
  3. Days Between the Settlement Used and the Bushels Loading
  4. Bushels Covered That Never Reached the Buyer
  5. Retained Class and Grade Risk on a Substitute Cover
  6. The Tail Left by Lot Arithmetic Across a Whole Crop Year
  7. Scoring a Season of Cover Against the Bid Sheet Target
  8. Splitting the Difference Between Physical and Paper Results
  9. Charging for the Risk the Hedge Leaves Behind
  10. The Weekly Page That Names What the Station Still Carries
  11. Which Open Pieces Are Worth Closing
M11 Mandate, a Worked Crop Year and What Cover Cannot Reach Ch 119-130
  1. Every Lot Must Name the Bushels Behind It
  2. Holding Off on Cover Is Itself a Market Call
  3. Permission to Run Part of the Book Open
  4. The Hedging Mandate a Grain Group Operates Under
  5. Appraising a Hedger on Inputs Rather Than Outcome
  6. A Crop Year of Cover, Part One: Harvest Intake and Forward Sales
  7. A Crop Year of Cover, Part Two: Choosing Boards, Months and Lots
  8. A Crop Year of Cover, Part Three: Two Rolls and a Limit Move
  9. A Crop Year of Cover, Part Four: Reconciling the Year
  10. The Assumptions Held Still So the Mechanics Could Be Taught
  11. Four Exposures Futures Cover Will Never Reach
  12. Where Class Spreads, Crush and Producer Structures Take Over

The brochure gives each of these 130 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 11 of twenty

It stands alone, and it is also the entry point to the Agricultural Commodities Desk Academy pathway.

Enrol or enquire See the whole pathway