BVG Presents: Basic Grain Marketing Calculator, to improve your grain marketing strategy

Transcription

1 BVG Presents: Basic Grain Marketing Calculator, to improve your grain marketing strategy

2 Aim: The intention of the Grain Marketing Calculator is to assist the farmer/producer to plan his grain marketing strategy. There are 2 versions: the Basic Grain Marketing Calculator and the De Luxe Grain Marketing Calculator The Basic Grain Marketing Calculator works with average prices: the idea is to give the user a quick overview and to provide him with an estimated projected income scenario, depending on the various factors.

3 How it works: The idea is for the Calculator to provide a snapshot on any specific day, leading up to option expiry per commodity, to work out a projected income scenario by taking into account - the income of physical contracts(pre-season and during the season) (in tonnage), and hedging the balance of the crop through SAFEX Trading on the JSE The Calculator is based on the following: the income of physical contracts + Hedges (through Futures & Options on SAFEX) + Crop left over and available for direct selling The Basic Grain Marketing Calculator focuses only on one contract month per commodity:

4 Opening View

5 Select the Instrument followed by contract\expiry

6 Total Expenses: Direct Expenses plus indirect expenses calculated pro-rata on the commodity and expiry date. - Information The information button can be pressed where applicable to assist or explain the meaning.

7 Expected tonnes: What the farmer \ producer expects pro-rata per commodity and expiry date.

8 Contracted tonnes: What the farmer \ producer has contracted during the pre-season and during the season, pro-rata per commodity and expiry date.

9 Avg Contracted Price: The average price at which the contracted tonnes were fixed.

10 Avg Differential: This is the location differential taken into account upon physical delivery.

11 Start Price: On the Analysis view, at which price should the table start

12 Price Increment: The ability for the user to select his own increment between prices on the Analysis view.

13 Record Count: The amount of records which must be displayed under the Analysis table.

14 The user cannot change any of these values. SAFEX Price: The current price of the contracts which was selected. Contract Size: The contract size as being traded on the JSE. Unhedged tonnes: Expected tonnes minus Contracted tons Contracted Value: Contracted tonnes multiplied by Avgerage Contracted Price End Price: At which price the Analysis table should stop displaying data Auto Calculate: Any changes will automatically re-calculate Calculate picture: A manual button to calculate changes

15 SAFEX DEALS: Type - Future, Call or Put Strike - The strike of the option, type is Call or Put Action - Buy or Sell Deal Price (Tonne) - Price per tonne Deal Price (Contract) - Price per Contract No. Contracts Size of the transactions * Deal Price: Please contact your BVG trader to give you a more accurate price when options are used.

16 SAFEX DEALS: Deal Price (Tonne) and Deal Price (Contract) The price will be automatically be calculated when the Refresh button is pressed or the price can manually be inserted.

17 Analysis: The analysis table gives the farmer a quick estimated overview of the cash flow based on the current SAFEX price and if the price increase or decrease SAFEX Price: The current SAFEX price The price movement (increase or decrease) The highlighted row is an indication of the breakeven point. X Silo Price: Price minus Avg Differential Contracted Contracted tonness multiplied by Avg Contracted Price Unhedged: Unhedged tonnes multiplied by X Silo Price SAFEX : Profit or loss for the SAFEX deals as on option close-out. Gross: Contracted plus Unhedged plus SAFEX Expense: Total expense which was inserted under input values.

18 Example of Basic Grain Marketing Calculator

19 Difference between Basic Grain Marketing Calculator and the (De Luxe option) The De Luxe option links directly to the client(s) SAFEX code The De Luxe option automatically add the deals All the information entered will be stored A summary of all the contracts entered An option to print the information to PDF Farmers\producers can list pre-season contracts information The trader and farmer will see the same information More than one SAFEX code can be linked-up The calculator(s) should only be used on SAFEX codes which is intended for hedging strategies Requirements for De Luxe version: The client needs to have an registered, active SAFEX code with BVG

20 Contacts For more information on the Grain Marketing Calculator or for the De Luxe Grain Marketing Calculator please contact: Dewald Barnard Tel: September 13