2004 Advanced Grain Procurement course

Return to Home Page April 30, 2004
For Immediate Release Options Trading Game Added to NCI Advanced Procurement Course Fargo, ND, USA -- Games are a great learning tool, but the games played next week at Northern Crops Institute (NCI) are not for children. The Advanced Grain Procurement Strategies short course, which runs from May 3-7, features a new options trading game that requires teams of participants to manage the risk of their cash position over a simulated six-month period using futures, options, and strategies they have learned during the course. The game provides advanced portfolio diagnostics to assist each team in their decision-making, according to instructor Dr. David Bullock, Risk Management Specialist at Minnesota's Department of Agriculture. Seventeen participants from Italy, Spain, Indonesia, Pakistan, Bangladesh, India, Philippines, Thailand, and China will attend the course. Among the course participants are two returnees who attended the NCI's basic grain procurement course in 2002. U.S. Wheat Associates and American Soybean Association (ASA) /United Soybean Board (USB) sponsor many of the participants. NCI Assistant Director John Crabtree says, “In the advanced course, we are looking at three types of risks that grain importers deal with on a daily basis in the global economy—quality risks, price risks, and monetary exchange rates. We focus on how companies can assess the amount of risk they have and how much risk they are willing to accept in the marketplace,” he concluded. Throughout the weeklong course, instructors will cover a variety of topics relating to risk management strategies including basis analysis, logistics management, trading strategies, contract specifications, quality requirements, international money exchange risks, hedging, transportation, and buyer/seller relations. Buyers of soybeans and wheat will attend breakout sessions specific to their needs. Participants will also tour a shuttle train facility at the Alton (ND) Grain Terminal. In another hands-on experience, participants use a computer lab session to apply concepts they learned regarding a corporate risk management technique called "value-at-risk", according to Bullock. “We will use a simulation add-in to Microsoft Excel called @Risk(tm) which is distributed by Palisade, Inc. The participants will learn the basic features of @Risk by building a soybean crush risk margin model. In addition, the session will introduce @Risk models covering farmer yield risk, wheat milling margins, valuing real options, and managing hedge portfolios,” he concluded. According to Virgil Miedema, South Asia Regional Director for ASA/USB, representatives from their main markets in South Asia--India, Bangladesh and Pakistan--are participating in next week's course to hone their skills in procuring agricultural commodities, particularly soybeans, from the United States. Miedema, who is attending the course, says, "I am optimistic that, as these markets mature and these economies grow, greater agricultural imports will result. This course is an important step in helping these buyers become comfortable with buying American. The ASA/USB have sent overseas buyers and potential buyers to this course in the past with very positive results.” Speakers will include: Dr. William Wilson, NDSU; Terry Garvert, Cargill; Brad Kjar, Alton Grain Terminal; Dr. David Bullock, MN Dept. of Agriculture; Rick Dusek, CHS Inc; Jim Peterson, ND Wheat Commission; Mike Krueger, The Money Farm; John Oades, U.S. Wheat Associates; Carrol Duerr, Midwest Shippers Association; Dr. Sam Chang, NDSU; Chris Davis, Well Fargo Bank. Northern Crops Institute supports regional agriculture and value-added processing by conducting educational and technical programs that expand and maintain domestic and international markets for northern-grown crops. # # #

For Immediate Release

Options Trading Game Added to NCI Advanced Procurement Course

Fargo, ND, USA -- Games are a great learning tool, but the games played next week at Northern Crops Institute (NCI) are not for children. The Advanced Grain Procurement Strategies short course, which runs from May 3-7, features a new options trading game that requires teams of participants to manage the risk of their cash position over a simulated six-month period using futures, options, and strategies they have learned during the course. The game provides advanced portfolio diagnostics to assist each team in their decision-making, according to instructor Dr. David Bullock, Risk Management Specialist at Minnesota's Department of Agriculture.

Seventeen participants from Italy, Spain, Indonesia, Pakistan, Bangladesh, India, Philippines, Thailand, and China will attend the course. Among the course participants are two returnees who attended the NCI's basic grain procurement course in 2002. U.S. Wheat Associates and American Soybean Association (ASA) /United Soybean Board (USB) sponsor many of the participants.

NCI Assistant Director John Crabtree says, “In the advanced course, we are looking at three types of risks that grain importers deal with on a daily basis in the global economy—quality risks, price risks, and monetary exchange rates. We focus on how companies can assess the amount of risk they have and how much risk they are willing to accept in the marketplace,” he concluded.

Throughout the weeklong course, instructors will cover a variety of topics relating to risk management strategies including basis analysis, logistics management, trading strategies, contract specifications, quality requirements, international money exchange risks, hedging, transportation, and buyer/seller relations. Buyers of soybeans and wheat will attend breakout sessions specific to their needs. Participants will also tour a shuttle train facility at the Alton (ND) Grain Terminal.

In another hands-on experience, participants use a computer lab session to apply concepts they learned regarding a corporate risk management technique called "value-at-risk", according to Bullock. “We will use a simulation add-in to Microsoft Excel called @Risk(tm) which is distributed by Palisade, Inc. The participants will learn the basic features of @Risk by building a soybean crush risk margin model. In addition, the session will introduce @Risk models covering farmer yield risk, wheat milling margins, valuing real options, and managing hedge portfolios,” he concluded.

According to Virgil Miedema, South Asia Regional Director for ASA/USB, representatives from their main markets in South Asia--India, Bangladesh and Pakistan--are participating in next week's course to hone their skills in procuring agricultural commodities, particularly soybeans, from the United States. Miedema, who is attending the course, says, "I am optimistic that, as these markets mature and these economies grow, greater agricultural imports will result. This course is an important step in helping these buyers become comfortable with buying American. The ASA/USB have sent overseas buyers and potential buyers to this course in the past with very positive results.”

Speakers will include: Dr. William Wilson, NDSU; Terry Garvert, Cargill; Brad Kjar, Alton Grain Terminal; Dr. David Bullock, MN Dept. of Agriculture; Rick Dusek, CHS Inc; Jim Peterson, ND Wheat Commission; Mike Krueger, The Money Farm; John Oades, U.S. Wheat Associates; Carrol Duerr, Midwest Shippers Association; Dr. Sam Chang, NDSU; Chris Davis, Well Fargo Bank.

Northern Crops Institute supports regional agriculture and value-added processing by conducting educational and technical programs that expand and maintain domestic and international markets for northern-grown crops.

# # #