Market Check's sophisticated marketing strategies are based on expert market intelligence .... strategy, which has prove
Managed Programs
You deliver grain …
We deliver results
Australia’s No. 1 performing pools ● Australia’s top performing Managed Programs ● Independent with all benefits returned to pool participants ● Payment security with credit insurance underwritten by Atradius Expert Performance Market Check’s sophisticated marketing strategies are based on expert market intelligence and our 22 year track record in the grain marketing industry.
Ideal for growers who: • Want a premium return on their grain • Enjoy the convenience of delivering to a pool • Want the benefits of a truly independent pool • Want peace of mind when it comes to grain marketing • Want transparency on pool performance • Value regular performance reports • Want to avoid hidden fees • Believe in balanced hedging strategies • Value guaranteed payment security with credit insurance covered by Atradius protecting your returns
Market Check
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Our Value Proposition
Managed Programs
Market Check’s independent strategic expertise is how we add value to your farm business. Our Strategy is available to all Market Check clients and is supported by our Managed Programs and Grain Agency services.
Top Performing Pools Transparent & Flexible Payment Security Market Intelligence
Market Intelligence Independent Strategy Position Management Tailored Advice
Advisory
Managed Programs
Agency
Personal Agent Grain Tenders Express Plus Marketing Advice
Membership
Strategy Guidance Networking Seminars MyPrice Access
Market Check
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Pre-harvest
Managed Program
Protect New Crop Prices
The Pre-harvest Strategic Program suits growers who are looking to protect downside risk for wheat, barley and canola but also participate if the market rises in the months ahead. Utilising an Options strategy, Market Check can protect your grain price from downward movements, with zero washout risk, whilst maintaining full potential to participate in a stronger market toward harvest if prices improve. Key Benefits
Individual Returns
• Peace of mind with an “insurance policy” against falling prices by using an Options strategy. • Upside is open - if the market rallies, you participate. • Less risk than forward contracts (no washout costs if the market rallies). • The only cost is the upfront Option premium. • Due to lower risk, more tonnes can be covered than with hedging or forward selling.
Your returns reflect market conditions on your contract date. The equity belonging to each Pre-harvest Pool participant will be paid out based on the Option strategy’s performance.
Strategy & Duration The Pre-harvest strategy utilises Options to protect against a fall in new crop prices or unfavourable currency movements. At harvest, when your production is secure, a Market Check Advisor will assist you with selecting which harvest strategy to roll into in order to best meet your objectives.
Fees The Pre-harvest pool does not have a management fee, however we require a deposit of $20/t for wheat & barley and $25/t for canola to cover the cost of the Options. For current poolers, we use unpaid pool equity to cover this deposit.
Payment Terms Payment is finalised when the Pre-harvest Program is wound up post-harvest. Pre-harvest Program participants are required to enter one of our Managed Programs where the applicable payment terms will apply for the balance of the equity.
How to Participate Call (02) 9499 4199 | Web marketcheck.com.au | Warehoused grain can be transferred across or deliver to your local site if available
Managed Programs
The Put Option pay-off Put Option sets price floor
If market rises
Price
If market falls
Price
Price Return
Buy Put Option
Net floor (Worst case)
Time Buy Put Option to protect price pre-harvest via a premium paid for a strike price, which combined creates a floor.
Return
Time Example 1: Market rises; Put Option not required and physical grain sold into a higher cash market.
Time Example 2: Market falls; Put Option is exercised netting a profit and off-setting a lower cash market.
Market Check
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Strategic
Managed Program
A Proven Strategy
The Strategic Managed Program is our flagship pool and is built around a post-harvest hedging strategy, suiting growers who want access to a premium marketing and price risk management program that involves the strategic use of derivatives such as Futures, Swaps & Options in conjunction with physical sales. Key Benefits • Australia’s only independent actively managed pool. • Premium marketing program. • Incorporates derivatives to protect strong prices. • Pricing power in physical and swap markets. • Flexible payment options including 60% cash advance. • Transparent reporting of strategies and performance delivered frequently. • Guaranteed payment security with credit insurance protecting your returns.
Strategy & Duration The foundation of the Strategic Pool is a post-harvest hedging strategy, which has proven to offer the best returns on average since deregulation in 2008. In essence, the Strategic Pool offers the opportunity to participate in a stronger relative market post-harvest, whilst also freeing up cash-flow. There are two Strategic Programs: Strategic 6 runs for six months and is finalised and paid out in June; and the Strategic 12 which
is run for a maximum of 12 months and finalised and paid out by the following harvest.
Individual Returns Your returns reflect market conditions at your site and date of delivery. Equity is distributed based on an internal indexing system which takes all these factors into account.
Fees A$7.50/mt flat fee deducted from the pool equity.
Payment Terms Choose from a number of payment options with interest charged or credited at a fixed AUD/mt commercial rate. • Advance payment. You decide how much (up to a maximum of 60%) and when you want it; • Distribution payments; • Deferred payment to the next financial year; • Flexible combinations of these payment options.
How to Participate Call (02) 9499 4199 | Web marketcheck.com.au | Warehoused grain can be transferred across or deliver to your local site if available Managed Programs
Australia’s No. 1 performing pools 300
4 year average returns for APW1
295
Market Check return 4 year average (Net)
260 255
290
250
285
245
275
240
270
235
265
APW1 4 year average (Net)
255 250
230
4 year average returns for F1 Market Check return 4 year average (Net)
F1 4 year average (Net)
225 Nov Dec Jan Feb Mar Apr May Jun Jul Aug
220
Nov Dec Jan Feb Mar Apr May Jun Jul
The Strategic Program’s performance on average over the past 4 seasons compared to the NSW, VIC and SA cash track markets net of all management fees, storage and interest. All values compared on a harvest, ‘apples with apples’ basis. See charts for both APW1 and F1.
Benefits of hedging Hedge Harvest unwind Jan-Mar Hedge Harvest unwind Apr-Jun Harvest Cash Jan-Mar Average Cash Apr-Jun Average Cash Jul-Aug Average Cash $240 $250 $260 $270 $280 8-year benchmarking analysis (Track NCL, PKE, MLB, PTA average) comparing hedging at harvest and unwinding post-harvest versus physical selling strategies into harvest/post-harvest.
Market Check
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Cash & Call
Managed Program
Smarter than Storing Grain
The Cash & Call Managed Program gives growers the benefit of price certainty and no carry costs through immediate physical grain sales, plus the opportunity to participate in future upside price movements through a Call Options strategy. Key Benefits
Individual Returns
• Price certainty with known price for grain. • No storage or interest costs. • 90% cash within 14 days and some of the remaining 10% invested in Call Options. • Unlimited and risk-free exposure to upside price movements in the first half of the following year through an Options strategy. • Payment can be deferred until the following financial year with interest credited accordingly. • Guaranteed payment security with credit insurance protecting your returns.
Your returns reflect market conditions on your delivery date, which dictates the entry level for the Options position.
Strategy & Duration Grain contracted in the Cash & Call program is sold shortly after delivery and tonnage is replaced with an Options strategy. The Options strategy will run for the first half of the following year, utilising a Call Options position during this time.
Fees A$7.50/mt flat fee deducted from the pool equity.
Payment Terms There will be two payment tranches with 90% cash within 14 days, and the remaining 10% paid in June, unless deferred for tax reasons. If there are any profits from the Options strategy, these will be paid in the final tranche in June. Participants can choose to defer payment until the following financial year in July and will be credited interest accordingly.
How to Participate Call (02) 9499 4199 | Web marketcheck.com.au | Warehoused grain can be transferred across or deliver to your local site if available
Managed Programs
How the Call Option Strategy works Call Option sets price floor
If market rises
Price
If market falls
Price
Price Return
Sell physical, buy Call Option Net floor (Worst case)
Time Sell physical and buy Call Option to participate if market rallies post-harvest.
Return
Time Example 1: Market rises; Call Option gives the owner the option to buy at the strike price, netting a higher net return.
Time Example 2: Market falls; Call Option expires, but no downside risk outside of the premium paid due to physical grain already being sold.
Market Check
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Harvest
Managed Program
Value over Harvest
Harvest Pools are suitable for growers who want to receive the best possible returns over the harvest period without participating in post-harvest markets. This program also suits growers looking to exit the Pre-harvest Pool who are chasing a harvest price return, or growers wanting Market Check’s skilled marketing team to return the best possible value over the November to January period. Key Benefits
Individual Returns
• Increasing the selling window to include the whole harvest period. • Smoothing out any harvest pressure volatility via hedging. • Allows Pre-harvest participants to access the harvest market prices. • Peace of mind knowing your grain marketing is being expertly managed. • Flexible payment terms including deferred payment.
Your returns reflect market conditions at your site and date of delivery. Equity is distributed based on an internal indexing system which takes all these factors into account.
Strategy & Duration
Flexible payment options outside of the standard final payment at the end of February are available with interest charged at a fixed AUD/mt rate per month based on the RBA cash rate at the time of contracting. • Advance payment – 60% on either the 15th or 30th Nov; 15th or 31st Dec; 15th or the 31st Jan. • Deferred payment to the next financial year in July. • Flexible combinations of these payment options.
The Harvest Program is not as extensive as the Strategic Pool, but depending on the market conditions, we will utilise derivatives such as Futures, Swaps & Options in conjunction with physical sales to maximise harvest returns. The program will run from the start of November until the end of January and settle in February. The final equity will be paid at the end of February unless deferred payment is requested.
Fees A$7.50/mt flat fee deducted from the pool equity.
Payment Terms
How to Participate Call (02) 9499 4199 | Web marketcheck.com.au | Warehoused grain can be transferred across or deliver to your local site if available
Managed Programs
Smarter Approach Harvest sales strategies consistently outperform averaging physical unhedged sales post-harvest Nov-Dec Average Cash Jan-Feb Average Cash Mar-Apr Average Cash May-Jun Average Cash Jul-Aug Average Cash $240 $250 $260 $270 8-year (2008 – 2015) benchmarking analysis (NCL, PKE, MLB, PTA average net of storage/interest) comparing physical selling strategies into harvest and post-harvest markets. Over time, averaging sales post-harvest is not a viable strategy.
Market Check
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Opportunity
Managed Programs Leverage Market Opportunities
Market Check will open Opportunity Pools depending on the market to help create maximum value for our clients’ grain. Whether it’s an opportunity at a specific time in the market, or due to an out of spec grade the experienced Market Check team has successfully run programs for a variety of non-traditional grades. Key Benefits
Individual Returns
• Independent actively managed pool. • Access to future price rallies and become a price maker. • Incorporates derivatives and spreads to protect prices. • Flexible payment options including 60% cash advance. • Transparent reporting of strategies and performance delivered frequently. • Guaranteed payment security with credit insurance protecting your returns. • Premium marketing program.
Your returns reflect market conditions in your region and date of delivery. Equity is distributed based on an internal indexing system which takes all these factors into account.
Strategy & Duration Opportunity pools are opened when there is a clear signal in the market that indicates a better future return than what is currently being offered in the spot market for a certain grade. The grade could be feed wheat, low oil canola or a low specification malt barley. Our goal is to use our expertise and sophisticated strategies to maximise returns for these grades whilst providing access to cash flow. The Opportunity Program’s duration depends on the market conditions, but will be finalised prior to the next harvest.
Managed Programs
Fees A$7.50/mt flat fee deducted from the pool equity.
Payment Terms Choose from a number of payment options with interest charged or credited at a fixed AUD/mt commercial rate. • Advance payment – 60% on either the 15th or 30th Nov; 15th or 31st Dec; 15th or the 31st Jan. • Distribution payments – 20% in Mar, May, July, Sept & Nov • Deferred payment to the next financial year with interest credited. • Flexible combinations of these payment options.
When opportunity strikes Taking advantage of wide spreads at harvest 360
310
340
300
APW1
290
250
Jul-11
Jun-11
Aug-11
-40
May-11
0
Apr-11
0
Mar-11
10 Feb-11
20
180 Jan-11
200
-20
-10 -20
-60
-30
-80
-40
-100
F1
240
FED1 discount to APW1
-120 -140
Nov-14
220
May-15
FED1
Apr-15
260
240
Mar-15
260
Feb-15
270
Jan-15
280
280
Dec-14
300
Oct-14
320
APW1
F1 discount to APW1
Strengthening of F1 versus APW1 in Port Adelaide during the 2014/15 season was present due to an increase in export demand. The strategy here was to take advantage of this wide spread at harvest by hedging the F1 when it was very weak, and then selling into a relatively stronger market post-harvest.
-160 The 2010/11 season saw significant strengthening of FED1 versus APW1 in Port Kembla and across other zones. The strategy here was to take advantage of this wide spread at harvest by hedging the FED1 when it was very weak, and then selling into a relatively stronger market post-harvest.
How to Participate Call (02) 9499 4199 | Web marketcheck.com.au | Warehoused grain can be transferred across or deliver to your local site if available Market Check
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Key People Trust our Expertise Brett Stevenson, Managing Director and Founder Brett comes from a farming background and has had a long and successful career in agri-commerce before founding Market Check in 1994. In addition to his role as Managing Director of Market Check, Brett has served as: Chairman of the Sydney Futures Exchange’s Wool Futures Committee; a key member of the Securities Institute of Australia Futures Markets and Trading Training Task Force; a member of the Grain Trade Australia Compliance and Commerce Committee; and a member of the ASX Water Derivatives Market Development Committee. Brett is a regular industry commentator and has featured several times in the press; on TV and radio; and presented at numerous industry events.
Tom Basnett, Head of Strategy Tom is one of Australia’s foremost grain marketing analysts and advisors and has been a key player at Market Check since 2004. He is integral to the company’s growth. Tom’s expert strategy development in grain marketing and price risk management has helped build Market Check’s reputation as the pre-eminent independent grain marketing firm in Australia. For over 12 years, Tom has given hands-on counsel and advice to Market Check clients, both family farms and corporates, to help them gain maximum value for their grain. Tom also plays a key role in the successful operation of our grain pools.
Richard Perkins, Head of Advisory Richard has an exemplary background in the grain industry with over 10 years’ experience in domestic and international grain markets. Richard has extensive knowledge in trading and risk management, having served as Trading Manager at one of Australia’s largest pool marketing and input finance programs before joining the team at Market Check. Richard is committed to using his experience and international market intelligence to further improve service and returns for Market Check clients. Managed Programs
Tim Phelps, Manager – Pools and Research Tim has held a number of roles at Market Check over the years, including in pool risk management, systems development, as a cotton advisor and grain trade advisor. As such, he has gained valuable insight into all areas of operations as well as expertise in the technical side of trading, leading to his current role as manager of our market leading pool products, as well as the research & strategy component of the business. Having graduated with First Class Honours in Agricultural Economics and Agricultural Finance, Tim has a keen interest in Finance & Risk Management.
Nick Crundall, Manager – Domestic Markets and Pools Nick is integral in managing the sales and execution of the Market Check pools. His experience and expertise is put to good use in helping add value to Market Check grower members. Nick improves grower returns through strategic trading and execution in the Australian domestic market, while also managing and developing suitable risk management strategies. Nick is well placed to take on this important role at Market Check, having previously worked with Agfarm and assisted CHS Trading, a US based multinational, establish a footprint in the Australian domestic market while also successfully managing the CHS Pool and the NSW/QLD domestic trading book.
Nicole Barraclough, Financial Manager – Pools Nicole is the Financial Manager of Market Check’s Managed Programs, a critical role for facilitating smooth operations that allow our advisors to provide growers with seamless, personalised service. Nicole has considerable experience in the grain industry, having previously held roles in Logistics and Trade Administration at AWB, ConAgra and Graincorp. She is well qualified for the role and holds a Bachelor of Applied Science (Agriculture). Nicole’s keen eye for detail is put to work ensuring the smooth and professional administration of our Managed Programs to ensure we can achieve the best possible outcome for our growers. Market Check
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Our Commitment Market Check does not trade grain nor have any affiliations with market participants. As Australia’s only independent actively managed pool provider, our only interest is to achieve the best returns for growers. We are committed to setting the industry benchmark for integrity and transparency in grain marketing and pool management. We are independently audited and our reporting is transparent, giving clear information on how returns are calculated.
Managed Programs
How to Participate Expression of interest Please note that this is an expression of interest and not a firm commitment. As tonnage is strictly limited, it is important to pre-book your tonnage as soon as possible. There are no washout costs if your crop fails. Personal Details Name: Phone: Fax: Email: Managed Program
Commodity
Tonnes*
Site(s) or Indicative Site(s)
NGR
*Please note that a minimum tonnage applies to some products. Call (02) 9499 4199 | Web marketcheck.com.au | Warehoused grain can be transferred across or deliver to your local site if available
Managed Programs
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About Market Check Market Check is an independent, Australian owned business that offers year-round grain marketing services to progressive Australian farmers. Our grower allied position and wealth of experience has ensured unwavering commitment to family and corporate grain producer clients for over 20 years. As a relationship-oriented business, long-term committed client partnerships are the core of our business. Market Check has cemented itself as a market leader in sound marketing and price risk management strategies for growers. Our farmer clients can gain peace of mind through knowing our transparent and disciplined approach, combined with continued investment in our operations, systems and people, ensures we help them achieve secure and consistently excellent returns.
Please note that Market Check advice is general in nature and has been prepared without taking into account clients’ individual objectives, financial situations and needs. Before acting on this advice, you should consider the appropriateness of the advice with regard to your own objectives, financial situation and needs. Before acquiring any financial products mentioned herein, please obtain a Product Disclosure Statement and consider it before making any decision about whether to acquire the product.
AgRisk Management Pty Ltd Suite 5.01, Level 5, 9 Help Street Chatswood 2067 | PO Box 245, Gordon NSW 2072 P 02 9499 4199 | F 02 9499 4188 | E
[email protected] | W marketcheck.com.au Financial Services License 223688 | ABN 33 067 313 722 Managed Programs
