Risk Management
Having a great product at the right price is only part of what makes a business successful. How a business copes with the unexpected is what separates those that stand the test of time.
McKeany-Flavell brings together its commercial intelligence and market expertise with veteran companies in the commodity and ingredient hedging arena.
Offering a complete suite of services in the form of education (such as our Hedging 101 seminar), risk management strategy development, futures and options transactions, and practical tools for portfolio monitoring and transparency, we are a one-stop shop for all of your company’s hedging and risk management needs.
Incorporating Technology into Risk Management Programs
One only need to visit an exchange trade floor to see how much the ancient process of trading goods has evolved; especially, in the last 10 years. Grain and oilseed pits once filled with people in what was described as “organized chaos” has been replaced with computers and electronic trading panels. The industry has been and continues to evolve; those who survive evolve with it.
McKeany-Flavell and our primary risk management partner firm, The PRICE Futures Group, have combined knowledge of strategy development with algorithms to create a new way to hedge commodity risk. Our strategies allow for bidirectional hedging of an underlying future market, giving you a hedge in rising or falling markets while minimizing the cost of running a hedging program.
Hedging 101
Learn the basics of commodity hedging using futures & options on futures. Effective risk management for commodity producers and users begins with a fundamental understanding of key hedging principles.
Through our relationship with The PRICE Futures Group, we offer customized hedging education. Whether for a handful of individuals within your procurement department or a room full of associates throughout your company, we will host a full-day educational coarse on all aspects of the hedging process.
Contact us for more information on proprietary hedging and risk management strategies.
Commodity Procurement Optimization Goals
Insure
Supply
Reduce Cost
& Waste
Mitigate
Risk
Optimize
Cycle Time
Decrease
Volatility
Support
Business Budgets
Commodity Procurement Purchasing Challenges
Commodity Prices
Unfortunately, commodity price movements are mostly a random walk at varying degrees of volatility. Both cost avoidance and supply assurance must be considered simultaneously.
Market Cycles
If there were no market cycles and/ or volatility, procurement purchasing decisions would be much simpler. Commodity purchasing would be made mostly with a singular
focus: supply assurance.
Volatility Factors
Factors that drive market cycles are numerous, and the ones we don’t know often have the most volatility associated with them.
Tradable Markets
If there is one constant in tradable markets, it is that they are rarely constant..