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.
SchoolLife Sciences
Credit points15
Subject Co-ordinatorGary Clark
Available to Study Abroad/Exchange StudentsYes
Subject year levelYear Level 3 - UG
Available as ElectiveNo
Learning ActivitiesN/A
Capstone subjectNo
Subject particulars
Subject rules
PrerequisitesN/A
Co-requisitesN/A
Incompatible subjectsFIN3DER
Equivalent subjectsN/A
Quota Management StrategyN/A
Quota-conditions or rulesN/A
Special conditionsN/A
Minimum credit point requirementN/A
Assumed knowledgeN/A
Readings
Agricultural Price Risk Management: The Principles of Commodity Trading
Resource TypeBook
Resource RequirementRecommended
AuthorWilliams, J. and Schroder, B.
Year1999
Edition/VolumeN/A
PublisherOxford University Press
ISBNN/A
Chapter/article titleN/A
Chapter/issueN/A
URLN/A
Other descriptionN/A
Source locationN/A
Agricultural Supply Chains and the Challenge of Price Risk
Resource TypeBook
Resource RequirementPrescribed
AuthorWilliams, J.
Year2014
Edition/VolumeN/A
PublisherRoutledge
ISBNN/A
Chapter/article titleN/A
Chapter/issueN/A
URLN/A
Other descriptionN/A
Source locationN/A
Career Ready
Career-focusedNo
Work-based learningNo
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
Graduate Capabilities
Intended Learning Outcomes
Subject options
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Melbourne (Bundoora), 2020, Week 09-15, Day
Overview
Online enrolmentYes
Maximum enrolment sizeN/A
Subject Instance Co-ordinatorGary Clark
Class requirements
Block Mode
Week:
9
-
9
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"
Lecture
Week:
12
-
12
One 3.00 h lecture per week
on weekdays
during the day
from week 12 to week 12
and delivered via face-to-face.
WorkShop
Week:
12
-
12
One 4.00 h 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 |