COMMODITY RISK MANAGEMENT
Credit points: 15
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.
Subject Co-ordinatorGary Clark
Available to Study Abroad/Exchange StudentsYes
Subject year levelYear Level 3 - UG
Available as ElectiveNo
Quota Management StrategyN/A
Quota-conditions or rulesN/A
Minimum credit point requirementN/A
Agricultural Price Risk Management: The Principles of Commodity Trading
AuthorWilliams, J. and Schroder, B.
PublisherOxford University Press
Agricultural Supply Chains and the Challenge of Price Risk
Self sourced or Uni sourcedN/A
Entire subject or partial subjectN/A
Total hours/days requiredN/A
Location of WBL activity (region)N/A
WBL addtional requirementsN/A
Graduate capabilities & intended learning outcomes
Intended Learning Outcomes
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Melbourne (Bundoora), 2020, Week 09-15, Day
Maximum enrolment sizeN/A
Subject Instance Co-ordinatorGary Clark
Five 9.00 h 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"
One 3.00 h lecture per week on weekdays during the day from week 12 to week 12 and delivered via face-to-face.
One 4.00 h workshop per week on weekdays during the day from week 12 to week 12 and delivered via face-to-face.
|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|