Efficiently managing potential challenges in the marketplace is a valued asset for the grain marketing industry. Individuals with a strong interest in learning techniques in managing market risks attended the IGP–KSU Risk Management course held August 7–11, 2017 at the IGP Institute Conference Center. The course hosted seven participants from five countries including Bulgaria, Japan, Costa Rica, Venezuela and the U.S.
The training consisted of two separate entities: basic and advanced. The beginning of the week focused on essential elements of price risk management and hedging through the use of grain futures, and also emphasized basis trading and its impact on those who purchase and sell grains and oilseeds.
“The interaction we’ve had with the instructor and his willingness to help us with any questions has been great in this course,” says Sergio Monge, industrial engineer at Trio Tech in Costa Rica. “He doesn’t tell us exactly what to do in the scenarios, but he gives examples to help us understand all of the concepts better that we should think about when making market decisions.”
The other portion of the course emphasized the use of futures options and over-the-counter (OTC) markets when dealing with risk management.
Participants gained knowledge of several topics that are centered on why the economy has futures markets. These topics involved areas such as the relationship between cash and futures markets, fundamental and technical analysis, futures spread and principles of hedging, principles of risk management and basis trading, principles of futures and option trading, OTC trading, futures put and call strategies for heding, spreads and butterflies, and a simulation of futures trading.
“I know the participants had a great time, as well as learned valuable tools that they can use when they go back home to their jobs,” says Jay O’Neil course coordinator and IGP Institute senior agricultural economist.
In addition to grain marketing and risk management, the IGP Institute also offers courses in feed manufacturing and grain quality management, and grain processing and flour milling. For more information about other upcoming courses, visit the IGP Institute website at www.grains.k-state.edu/igp.
