Price risk management tools

An introduction to options

Building a marketing strategy is a constantly evolving process. Each year will need different tools and techniques to protect against, and benefit from, price volatility. Here we provide the basics of how options work to protect grains and oilseeds form price volatility.

Examples of marketing strategies that use options contracts

Options contracts can be used to supplement your existing marketing plan rather than replace it. Using options can provide returns even when stores are empty of physical grain, but it requires familiarity of potential future market direction.

Price risk management tools for rapeseed in the UK

With the volatility in rapeseed markets, this analysis explores how to better mitigate risk, as well as which price risk management tools are effective.

Budgeting your harvest 2023 crops, why is it important?

Budgeting is a useful tool when growing grains and oilseeds. Calculating costs of production by tonne by crop type can help you understand at what price your crop could make a profit, and so help manage your cashflow.

Breakeven yields; an alternative way to view profit margins.

Beating a forecast 2021/22 UK average wheat yield by 1.0t/ha could net an average farm business a gross margin per hectare 88.6% higher than if the average yield was achieved.

Oilseed rape for harvest 2022 – how could you mitigate some risk?

The support in harvest 2022 oilseed rape (OSR) values could pose a significant incentive for growers to plant this crop this summer.

Analyst Insight: Have you thought about marketing grain for harvest 23?

Global grain markets have been supported but at the same time subject to a large degree of volatility since the war between Ukraine and Russia began.

Selling forward during high prices

New-crop prices rallying before harvest give the opportunity for tonnage to be sold forward. Selling forward is a relatively simple marketing strategy on the surface, but dive deeper and there is the choice of futures contracts or options contracts too.

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