|Online courses offer farmers ability to experience grain marketing|
|Wednesday, December 18, 2013 9:48 PM|
BY JAMES J. HOORMAN
Farmers now have a new way of learning by using the computer and taking online courses through a webinar. Growers, who want to experience grain marketing using real-world strategies without any of the real-world risks, can take advantage of a series of courses taught by experts from Ohio State University’s College of Food, Agricultural and Environmental Sciences that can offer successful, hands-on grain marketing approaches.
The courses, to be offered Jan. 7 and 21, Feb. 4 and 18 and March 4, are taught online and will offer participants the ability to experience grain marketing simulations using marketing options commonly used in grain marketing without the risk of actually taking a position on real bushels, said Chris Bruynis, an Ohio State University Extension educator.
Dr. Mathew Roberts and Bruynis are the featured speakers and teachers for this grain marketing series of classes through a webinar online. OSU Extension is the outreach arm of the college. Participants will learn how to use futures and options, make a marketing plan to fit their farm business, use crop insurance as a grain marketing tool and how to understand financial statement analysis in relationship to their grain marketing plan, Bruynis said.
“The series of online courses enables farmers to log in from home. This will allow more people access to the courses as well as target younger farmers who are looking for this kind of educational opportunity,” Bruynis said. “Participants will gain a better understanding of the tools available to market grain, the resources to look at in making those decisions including the risk that their farm financial position can handle.”
Using the Commodity Challenge, a program managed by the Center for Farm Financial Management at the University of Minnesota, growers will participate in a grain marketing simulation exercise that allows use of all the marketing options used in grain marketing without the risk of actually taking a position on real bushels, Bruynis said. The online-trading game features real-time cash, futures and options quotes for corn, soybeans and wheat from local markets here in Ohio.
The simulated grain marketing will allow participants to market, on paper, the bushels we’ve assigned them to try out the grain marketing tools used in the real world without the risk of doing it with real bushels. The Commodity Challenge software does not allow participants to speculate, it is designed to only allow participants to sell the bushels assigned. Participant can use basis contracts, puts, calls and can sell cash on the market, basically all of the tools we have in real life without any of the real risk of marketing real bushels.
Call options are a type of security that gives the owner the right to “buy” a commodity at a certain price by a certain date. Put options give the owner the right to “sell” a commodity at a certain price by a certain date. Farmers generally buy calls when they expect prices to increase and puts when they expect prices to decline. Puts and calls are “options” because the owner of the option has the “right”, but not the “obligation”, to either buy the commodity (call option) or the right to sell (put option) at the strike price. Your loss on options is limited to the amount that you paid for the option.
The workshops are from 11:30 a.m.-1:30 p.m. with each course building on information taught in the previous course. Registration for the online classes is $135 but each participant can earn part or all of the cost back through their participation in the course. Part of each participant’s registration costs will be placed in a pool that will be distributed back to participants based on how well they market their grain in the commodity challenge. Those who sell their challenge grain for the average of all course participants will earn a refund of $100 from their registration fee. Those who do above the course average will earn more than $100 and those who do less than the course average will receive less than $100.
“The refund is an incentive to give participants a reason to do as well as they can in the commodity challenge,” Bruynis said.