Course 17 of 20 · Agricultural Commodities Desk Academy

Options & Producer Pricing Structures

Stage D, Complex specialisation and optionality. Level 8 of 10.

Optionality: option pricing, volatility and sensitivities on agricultural futures, and assembling producer pricing programmes such as minimum price, averaging and accumulator structures from those options.

128 chapters · 12 modules · every chapter one 8 to 10 minute explainer · builds on: Course 05, Course 10, Course 11

Enrol or enquire See the 128 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 · 128 chapters

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

M0 Pricing a Crop That Is Not Yet Grown Ch 1-10
  1. The Pricing Window That Opens Before Planting and Shuts at Harvest
  2. Uncertain Yield Is Why a Forward Sale Will Not Do
  3. Who Holds the Right and Who Granted It
  4. Cover Against a Falling Board Belongs to the Unpriced Bushel
  5. Cover Against a Rising Board Belongs to the Unbought Bushel
  6. Why Farmers Are Offered Options and Not Futures
  7. A Premium the Farmer Never Sees Charged
  8. Where Grain Optionality Is Listed and Where It Is Negotiated
  9. What the Board Hedge and the Basis Decision Already Settled
  10. The Farmgate Contract, the Grade and the Default That Sit Elsewhere
M1 What a Grain Dealer's Quote Is Made Of Ch 11-21
  1. The Strike Quoted in Cents per Bushel
  2. Contract Size, Planted Acres and the Count of Options
  3. The Advantage a Strike Already Holds Over the Board
  4. The Part of the Quote That Buys Crop-Year Movement
  5. Erosion Running Faster as the Delivery Month Approaches
  6. Old Crop and New Crop Months Price Differently
  7. Short-Dated Listings That Stop Trading Before the Month They Reference
  8. Checking a Dealer's Put Against Its Own Call
  9. What Moves Between an Indication and a Filled Order
  10. Why Two Grain Dealers Price One Farm's Floor Differently
  11. A Quote Expressed as a Wider Bid Rather Than a Premium
M2 Crop-Year Volatility Ch 22-31
  1. Movement, Not Direction, Is What the Assumption Prices
  2. New Crop Assumptions Are Not Old Crop Assumptions
  3. The Weather Market and the Weeks That Decide a Yield
  4. Acreage, Stocks and Supply Estimate Days
  5. Harvest Arrives and the Assumption Falls Away
  6. Strikes Far Below the Board and Strikes Far Above
  7. Where an Elevator Finds a Movement Figure It Can Defend
  8. A Grain Market That Gaps: Drought, Frost and an Export Ban
  9. Buying Cover in the Week It Costs Most
  10. Three Ways a Movement Figure Gets Misread in a Grain Office
M3 What the Holding Does Day to Day Ch 32-42
  1. Bushel Equivalent, the Only Form a Merchandiser Can Act On
  2. Why That Figure Travels and a Short Futures Does Not
  3. The Figure That Moves Fastest in Expiry Week
  4. The Daily Charge for Keeping Cover Over Financed Bins
  5. A Quiet Week That Still Cost the Desk Money
  6. Two Figures Daily and the Remainder Monthly
  7. Options Read Beside Bushels on One Position Page
  8. Why Most Elevators Do Not Rebalance Their Cover
  9. When a Reported Sensitivity Should Not Be Trusted
  10. Telling a Producer Programme From a Position Taken on the Board
  11. Explaining the Option Book to a Cooperative Board
M4 Yield and Price Together Ch 43-52
  1. A Floor Over Bushels That May Not Exist
  2. Why Short Crops and Strong Prices Arrive Together
  3. Covering the Expected Crop Leaves a Farm Wrong Both Ways
  4. Covering Only the Bushels a Poor Season Still Delivers
  5. What Revenue Protection Already Floors for a Farm
  6. The Price Sitting Inside an Insurance Guarantee
  7. Where an Insurance Floor and a Bought Put Overlap
  8. Protecting Revenue Rather Than Price
  9. The Farm That Was Floored and Still Could Not Pay Its Lender
  10. A Lender Requiring a Floor as a Condition of Credit
M5 The Minimum Price Programme Ch 53-64
  1. Every Unpriced Bushel Is a Long Position
  2. A Floor Held by the Farmer, Granted by the Merchant
  3. The Floor Level Set Against Seed, Fertiliser, Rent and Interest
  4. Two Board Outcomes, Deliberately Simplified
  5. Charging for the Floor Without Sending an Invoice
  6. Which Fields Are Covered and Which Are Left Bare
  7. The Floor That Held While the Local Bid Fell Away
  8. Re-Ownership: Selling the Cash Grain and Holding a Call
  9. The Call That Replaced the Bin and the Basis It Did Not Buy
  10. One Farm's Production Floored Across Three Delivery Months
  11. Latitude a Grain Bid Gives Away Without Charging
  12. The Argument That Producer Programmes Serve Farmers, and Its Assumptions
M6 The Buyer's Ceiling Ch 65-72
  1. Short Every Bushel Sold Forward and Not Yet Bought
  2. A Ceiling Held by the Miller, Granted by the Merchant
  3. The Ceiling Level Against the Margin in a Flour or Feed Sale
  4. Price Cover for a Tender Before the Award
  5. A Short Assembled From Many Small Forward Sales
  6. The Ceiling Bought Over Bins Already Full
  7. Sourcing Months and the Gap Before the Next Harvest
  8. The Feed Buyer's Ceiling and Where This Material Stops
M7 Averaging, Pools and Managed Programmes Ch 73-81
  1. A Farm Prices Across Weeks and an Option Expires on One Day
  2. The Mean of the Pricing Days as the Settlement Reference
  3. What Smoothing Saves and What It Gives Up
  4. Building the Window From the Days the Bid Already Uses
  5. Monthly Cover Across a Harvest Delivery Schedule
  6. Cover That Runs Itself Down as Days Fix
  7. A Window Too Short to Smooth Anything
  8. The Pooled and Managed Programme a Cooperative Runs for Members
  9. Renewing Cover Each Quarter Against Buying the Crop Year Once
M8 Collars, Participation and Conditional Cover Ch 82-91
  1. Two Legs and a Price a Farm Can Repeat Back
  2. A Floor Held and a Ceiling Granted by the Same Farm
  3. Both Levels Set Against One Breakeven
  4. No Premium at Signing and a Bill in a Drought Year
  5. The Third Leg That Reopens the Downside
  6. A Collapse Followed Through the Gap
  7. Keeping a Share of a Weather Rally
  8. A Board Level That Cancels the Floor
  9. Taking a Dealer's Programme Sheet Apart Before Offering It
  10. The Argument for Funding Cover by Granting Upside, and What It Assumes
M9 The Accumulator Ch 92-104
  1. What an Accumulator Actually Grants and to Whom
  2. The Observation Schedule That Adds Bushels
  3. A Price Above the Board and What Paid for It
  4. The Clause That Doubles the Accumulation
  5. The Knock-Out That Cancels the Programme in a Falling Market
  6. The Bad Path, Worked Observation by Observation
  7. More Bushels Committed Than the Farm Will Grow
  8. Taking the Structure Apart Into the Entitlements Beneath It
  9. What the Farmer Heard and What the Farmer Signed
  10. Explaining an Accumulator to the Person Who Will Sign It
  11. What a Merchant Establishes Before Offering One to a Farm
  12. The Merchant's Own Position After Granting an Accumulator
  13. Margin, Buyout and the Producer Who Walks Away
M10 Granting Protection and Living With It Ch 105-116
  1. The Granting Seat Inside a Grain House
  2. Covered and Uncovered Grants Are Different Permissions
  3. Granting a Ceiling Over Grain the House Holds in Store
  4. Buying Back at the Board What Was Granted at the Farmgate
  5. The Residual the Two Legs Leave Behind
  6. Administered Price Support Is Not a Traded Entitlement
  7. What a Grain House Must Be Able to Reprice Unaided
  8. The Programmes a Country Elevator Should Decline to Offer
  9. Limits That Bite on a Grain Option Book
  10. A Mark Nobody in Origination Produced
  11. The Mandate Naming Each Programme a Desk May Offer
  12. The Farmer Who Cannot Deliver and the Grant That Became a Loss
M11 Valuing the Programme and Defending the Offer Ch 117-128
  1. What a Programme Pays Under Each Board Outcome, Then the Mean
  2. Why Applying the Floor to an Averaged Board Price Understates It
  3. Board Paths Tied to Acreage and Yield Assumptions
  4. Valuing the Upside a Farm Granted Away
  5. The Band Priced as Two Averages and a Subtraction
  6. Valuing an Accumulator With Its Leverage Included
  7. What the Weights Alone Decide
  8. What an Averaged Figure Cannot Settle
  9. What a Floor Cannot Do for a Farm
  10. A Worked Farm Programme, Part One: The Exposures Stated
  11. A Worked Farm Programme, Part Two: Structures Chosen and Sized
  12. A Worked Farm Programme, Part Three: Valued, Offered and Defended

The brochure gives each of these 128 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 17 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