COMMODITY RISK MANAGEMENT
AGR3CRM
2020
Credit points: 15
Subject outline
This subject introduces students to factors impacting on agricultural production which are beyond the farm gate. It focuses on understanding commodity markets and the price discovery mechanism, local pricing, supply chains, price-currency risks, and the global agribusiness environment. Risk is examined and the need for forward markets to offset this risk is explained. Problems with supply chain integration will be detailed, while strategies to manage both price and currency risk will be evaluated. Topics include the market price mechanism, commercial trade markets, characteristics of forward markets, identifying market position and calculating exposure through position valuation, risk transfer mechanisms, establishing risk management objectives, problems with forward contracts under high default risk, futures and options hedging, basis risk, over-the-counter bank pricing products, and managing commodity risks within the organisation.
School: Life Sciences (Pre 2022)
Credit points: 15
Subject Co-ordinator: Gary Clark
Available to Study Abroad/Exchange Students: Yes
Subject year level: Year Level 3 - UG
Available as Elective: No
Learning Activities: N/A
Capstone subject: No
Subject particulars
Subject rules
Prerequisites: N/A
Co-requisites: N/A
Incompatible subjects: FIN3DER
Equivalent subjects: N/A
Quota Management Strategy: N/A
Quota-conditions or rules: N/A
Special conditions: N/A
Minimum credit point requirement: N/A
Assumed knowledge: N/A
Learning resources
Agricultural Price Risk Management: The Principles of Commodity Trading
Resource Type: Book
Resource Requirement: Recommended
Author: Williams, J. and Schroder, B.
Year: 1999
Edition/Volume: N/A
Publisher: Oxford University Press
ISBN: N/A
Chapter/article title: N/A
Chapter/issue: N/A
URL: N/A
Other description: N/A
Source location: N/A
Agricultural Supply Chains and the Challenge of Price Risk
Resource Type: Book
Resource Requirement: Prescribed
Author: Williams, J.
Year: 2014
Edition/Volume: N/A
Publisher: Routledge
ISBN: N/A
Chapter/article title: N/A
Chapter/issue: N/A
URL: N/A
Other description: N/A
Source location: N/A
Career Ready
Career-focused: No
Work-based learning: No
Self sourced or Uni sourced: N/A
Entire subject or partial subject: N/A
Total hours/days required: N/A
Location of WBL activity (region): N/A
WBL addtional requirements: N/A
Graduate capabilities & intended learning outcomes
Graduate Capabilities
Intended Learning Outcomes
Melbourne (Bundoora), 2020, Week 09-15, Day
Overview
Online enrolment: Yes
Maximum enrolment size: N/A
Subject Instance Co-ordinator: Gary Clark
Class requirements
Block ModeWeek: 9 - 9
Five 9.00 hours block mode per week on weekdays during the day from week 9 to week 9 and delivered via face-to-face.
Five 9-hour days in Week 9
LectureWeek: 12 - 12
One 3.00 hours lecture per week on weekdays during the day from week 12 to week 12 and delivered via face-to-face.
WorkShopWeek: 12 - 12
One 4.00 hours workshop per week on weekdays during the day from week 12 to week 12 and delivered via face-to-face.
Assessments
| Assessment element | Category | Contribution | Hurdle | % | ILO* |
|---|---|---|---|---|---|
One written 2-hour examination | N/A | N/A | No | 60 | SILO1, SILO2, SILO3, SILO4, SILO5, SILO6 |
One written in-class test - (equivalent 500 words) | N/A | N/A | No | 10 | SILO1 |
One written report (hedging exercise) - (equivalent 1500 words) | N/A | N/A | No | 20 | SILO2, SILO3, SILO4, SILO5, SILO6 |
One written report (trading account exercise) - (equivalent 500 words) | N/A | N/A | No | 10 | SILO2 |