Commodity markets are central to Nebraska抯 economy. The study of agricultural marketing concepts, tools and strategies as they relate to risk management for agricultural producers, commodity merchandisers, processors and other traders are essential for students seeking a career in the agribusiness industry

Mattos, Fabio

Peterson, Jeff

Van Tassell, Larry

English

DigitalCommons@University of Nebraska

University of Nebraska - LincolnDigitalCommons@University of Nebraska - LincolnCornhusker Economics Agricultural Economics Department6-29-2016Commodity Trading Room Comes On-Line atUNLLarry Van TassellUniversity of Nebraska-LincolnFabio MattosUniversity of Nebraska-LincolnJeff PetersonUniversity of Nebraska-LincolnFollow this and additional works at: http://digitalcommons.unl.edu/agecon_cornhuskerPart of the Agricultural Economics CommonsThis Article is brought to you for free and open access by the Agricultural Economics Department at DigitalCommons@University of Nebraska -Lincoln. It has been accepted for inclusion in Cornhusker Economics by an authorized administrator of DigitalCommons@University of Nebraska -Lincoln.Van Tassell, Larry; Mattos, Fabio; and Peterson, Jeff, "Commodity Trading Room Comes On-Line at UNL" (2016). CornhuskerEconomics. 786.http://digitalcommons.unl.edu/agecon_cornhusker/786agecon.unl.edu/cornhuskereconomics   Cornhusker Economics Commodity Trading Room Comes On-Line at UNL  It is the policy of the University of Nebraska–Lincoln not to discriminate based upon age, race, ethnicity, color, national origin, gender-identity, sex, pregnancy, disability, sexual orientation, genetic information, veteran’s status, marital status, religion or political affiliation.    Commodity markets are central to Nebraska’s economy. The study of agricultural marketing concepts, tools and strategies as they relate to risk management for agricultural producers, commodity merchandisers, processors and oth-er traders are essential for students seeking a career in the agribusiness industry. With the assistance of generous donors, the De-partment of Agricultural Economics at the Uni-versity of Nebraska-Lincoln recently established a commodity trading room that provides stu-dents real-time access to commodity markets and   advanced   training   in   market   analysis,   ___________________ 1  CoBank, CHS Inc, ADM, Cargill, Nebraska Soy-bean Board, Nebraska Corn Board, Lansing Trade Group LLC, Scoular, Andersons Inc, AGP, and Ne-braska Wheat Board. June 29, 2016 Market Report  Year Ago  4 Wks Ago  6-24-16 Livestock and Products, Weekly Average          Nebraska Slaughter Steers, 35-65% Choice, Live Weight. . . . . .  .  148.23  130.00  116.11 Nebraska Feeder Steers, Med. & Large Frame, 550-600 lb. . . . .  305.08  176.50  177.63 Nebraska Feeder Steers, Med. & Large Frame 750-800 lb. . .. .  241.78  *  152.51 Choice Boxed Beef, 600-750 lb. Carcass. . . . . . . . . . . . . .  254.31  222.40  216.82 Western Corn Belt Base Hog Price Carcass, Negotiated . . . . . . . . . . . . . ..  74.05  76.84  81.88 Pork Carcass Cutout, 185 lb. Carcass 51-52% Lean. . . . . . . . . . . . . . . . . . . .  82.16  85.16  88.00 Slaughter Lambs, wooled and shorn, 135-165 lb. National. . . . . . .  158.67  139.90  149.07 National Carcass Lamb Cutout FOB. . . . . . . . . . . . . . . . . . . . . . . . . . .  257.10  *  338.48 Crops, Daily Spot Prices          Wheat, No. 1, H.W. Imperial, bu. . . . . . . . . . . . . . . . . . . . .  5.09  3.82  3.34 Corn, No. 2, Yellow Nebraska City, bu. . . . . . . . . . . . . . .  .  3.71  3.86  3.47 Soybeans, No. 1, Yellow Nebraska City, bu. . . . . . . . . . . . . .. . .  9.86  10.66  10.31 Grain Sorghum, No.2, Yellow Dorchester, cwt. . . . . . . . . . . . . . . . . .  7.46  6.17  5.62 Oats, No. 2, Heavy Minneapolis, Mn, bu. . . . . . . . . . . . . . .  2.94  *  2.57 Feed          Alfalfa, Large Square Bales, Good to Premium, RFV 160-185 Northeast Nebraska, ton. . . . . . . . . . .  *  138.15  165.00 Alfalfa, Large Rounds, Good Platte Valley, ton. . . . . . . . . . . . . . . . .  *  90.00  75.00 Grass Hay, Large Rounds, Good  Nebraska, ton. . . . . . . . . . . . . . .. . . .  90.00  85.00  80.00 Dried Distillers Grains, 10% Moisture Nebraska Average. . . . . . . . . . . . . . . .  121.50  149.00  159.00 Wet Distillers Grains, 65-70% Moisture Nebraska Average. . . . . . . . . . . . . . . .  41.00  47.50  51.00 47.50 51.00⃰  No Market          marketing, merchandising, and futures and options markets.  Combined with classroom courses, the trad-ing room experience prepares students to be more successful as they enter the competitive job market.  The Commodity Trading Room also provides a vehi-cle for both students and faculty to conduct research in these areas. Located in Filley Hall on UNL’s East Campus, the UNL Agricultural Economics Commodity Trading Room features individual computer workstations. The workstations are connected in real-time to cash and futures markets, such as grain elevators around the country and the CME Group in Chicago. Work-stations allow access to software packages such as Bar-chart Trader, GrainBridge, and Telvent DTN ProphetX. Students are able to analyze markets, fore-cast prices, execute trades and evaluate their actions, just as they would in the professional world. In sum-mary, the room provides experimental learning op-portunities that allow students to apply economic the-ories learned in the classroom to real-world situations in commodity markets. Industry input was used to develop and refine a cur-riculum to utilize the trading room and to ensure stu-dents obtain needed skills to succeed in a modern, global economy.  Representatives from The Scoular Company, CHS Inc., Archer Daniels Midland, Ander-sons Inc., Commodity Solutions, Lansing Trade Group LLC, Cargill Inc., and Gavilon were assembled to spend an afternoon discussing the merits of a com-modity trading room and the curriculum that would prepare students.  Two of the main considerations were to get students involved in the curriculum earlier in their academic career to prepare them for intern-ships, and to include more coursework on the cash markets as that is where the majority of their work will be. Commodity Marketing Courses. The two commodity courses already taught in the de-partment were AECN 325, Marketing of Agricultural Commodities, and AECN 435, Advanced Agricultural Marketing Management.  These two courses were re-vised and four other courses were developed.  Our new curriculum in commodity marketing now con-sists of the following three-credit courses:    AECN 235, Introduction  to Commodity Mar-keting: This course focuses on the foundations of com-modity markets. It discusses how markets were created, how commodities are traded from pro-ducers to final consumers, the role of transpor-tation and storage, among other topics. It pro-vides a broad and detailed discussion of eco-nomic theories behind markets, how they work in practice, and the current state of these mar-kets in the world.  AECN 325, Marketing of Agricultural Com-modities: This course focuses on operation and use of agricultural commodity markets and institu-tions as applied to enterprise and firm risk management. It covers cash, futures and fu-tures option markets, basis, hedging, price dis-covery, fundamental analysis, and risk manage-ment strategies.  It is also taught as an online class each summer.  AECN 336, Grain Merchandising:  This course studies grain merchandising con-cepts, tools, and strategies as they relate to grain buyers. It helps students understand how grain is traded from the perspective of the grain buyer.  AECN 435, Advanced Agricultural Marketing Management: This course in an advanced study of agricultur-al marketing concepts, tools, and strategies as they relate to risk management for agricultural producers, commodity merchandisers, proces-sors, and other traders. A major objective of this course is to teach students to design mar-keting plans to meet specific risk management and marketing strategies, including using com-binations of derivatives and insurance prod-ucts.   AECN 436, Commodity Price Forecasting: The overall objective of this course is to teach students how to analyze commodity markets using  fundamental  and  technical  approaches.  The most common techniques from each approach are discussed, focusing on how they can be imple-mented and their advantages and disadvantages. How these two approaches differ and how they can complement each other in commodity market analysis is also covered.  AECN 495D, Internship in Commodity Market-ing:  The overall objective of this internship is to allow students to gather more exposure to commodity markets and hands-on experience in the field.  At a minimum, AECN 235 is recommended before stu-dents engage in an internship. As one individual who visited our recent Commodity Trading Room open house commented, “The Grain Trading Room is very impressive and from an indus-try perspective, it will create a differential advantage for the students who choose to utilize the University of Nebraska’s offerings that it provides.  I had the oppor-tunity to visit with many of the others in the room and   we all agree that students that have these classes on their resume will have a leg up on their competi-tion.” What’s Next? A new Commodity Marketing Club is being de-signed by students under the tutelage of Dr. Fabio Mattos and Jeff Peterson.  The club will provide a platform to invite industry professionals to talk about current issues and professional opportuni-ties.  Commodity trading/marketing challenges will be conducted each semester to allow students to test their skills against one another, with the winners given cash awards. With the trading room and accompanying course-work completed, we are also in the process of de-veloping a professional marketing workshop that will allow agricultural producers and other profes-sionals to engage in a multiple day course that will cover the major curriculum designed for our stu-dents.        Larry Van Tassell, Department Head Department of Agricultural Economics University of Nebraska lvantassell2@unl.edu  Fabio Mattos, (402) 472-1796 Assistant Professor Department of Agricultural Economics University of Nebraska-Lincoln fmattos@unl.edu  Jeff Peterson Adjunct Instructor Department of Agricultural Economics University of Nebraska jpeterson13@unl.edu   

Commodity Trading Room Comes On-Line at UNL

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Commodity Trading Room Comes On-Line at UNL

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