IGP, KSU hosts risk management training for grain marketing industry

by Holly Demaree
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IGP KSURisk Management course Aug 2017
Jay O’Neil, senior agricultural economist at the IGP Institute, explains principles of risk management in a lecture during the IGP–KSU Risk Management course.
Photo courtesy of IGP KSU.
 
MANHATTAN, KANSAS, U.S. – 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 Aug. 7–11 at the IGP Institute Conference Center, Manhattan, Kansas, U.S. The course hosted seven participants from five countries including Bulgaria, Japan, Costa Rica, Venezuela and the United States.

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,” said 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 op on trading, OTC trading, futures put and call strategies for hedging, spreads and butterflies, and a simulation of futures trading.

“I know the participants had a great me, as well as learned valuable tools that they can use when they go back home to their jobs,” said Jay O’Neil, course coordinator and IGP Institute senior agricultural economist. 

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