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Agricultural Finance: From Crops to Land, Water and Infrastructure

Book Description

A comprehensive resource for understanding the complexities of agricultural finance

Agricultural Finance: From Crops to Land, Water, and Infrastructure is a pioneering book that offers a comprehensive resource for understanding the worldwide agriculture markets, from spikes in agricultural commodity prices to trading strategies, and the agribusiness industry generally to the challenges of feeding the planet in particular. The book also goes in-depth on the topics of land, water, fertilizers, biofuels, and ethanol. Written by Helyette Geman—an industry expert in commodity derivatives—this book explores the agricultural marketplace and the cycles in agricultural commodity prices that can be the key to investor success.

This resource addresses a wide range of other important topics as well, including agricultural insurance, energy, shipping and bunker prices, sustainability, investments in land, subsidies, agricultural derivatives, and farming risk-management. Other topics covered include structured products and agricultural commodities ETFs; trade finance in an era of credit shortage; securitization and commodity-linked notes; grains: wheat, corn, soybeans; softs: coffee, cocoa, cotton; shipping as a key component of agricultural trade; and the major agricultural shipping routes and the costs. The book:

  • Offers the first comprehensive resource that deals with the all aspects of agricultural finance

  • Includes information that is crucial for pension funds, asset managers, hedge funds, agribusiness corporates, CTAs and regulators

  • Covers a range of topics from agricultural bunker prices, futures, options to major shipping routes and the costs

  • This text is a must-have resource for accessing the information required to trade successfully in the agricultural marketplace.

    Table of Contents

    1. Title Page
    2. Copyright
    3. Dedication
    4. Acknowledgments
    5. About the Author
    6. Preamble
    7. Chapter 1: Physical and Financial Agricultural Markets
      1. 1.1 Agriculture and the Beginning of Human Sedentarization
      2. 1.2 The Outlook of Agricultural Commodities Markets
      3. 1.3 History of Commodity Futures and Spot Markets
      4. 1.4 Shipping and Freight
    8. Chapter 2: Agricultural Commodity Spot Markets
      1. 2.1 Introduction
      2. 2.2 Price Formation in Agricultural Commodity Markets
      3. 2.3 Volatility in Agricultural Markets
    9. Chapter 3: Futures Exchanges – Future and Forward Prices – Theory of Storage – The Forward Curve
      1. 3.1 Major Commodity Exchanges
      2. 3.2 Forward Contracts
      3. 3.3 Futures Contracts
      4. 3.4 Relationship between Forward and Futures Prices
      5. 3.5 Example of a Future Spread
      6. 3.6 Inventory and Theory of Storage
      7. 3.7 The Benefits of Forward Curves
      8. 3.8 Stochastic Modeling of the Forward Curve
    10. Chapter 4: Plain Vanilla Options on Commodity Spot and Forward Prices. The Bachelier–Black–Scholes Formula, the Merton Formula, the Black Formula
      1. 4.1 Introduction
      2. 4.2 Classical Strategies involving European Calls and Puts
      3. 4.3 Put–Call Parity for a Non-dividend Paying Stock
      4. 4.4 Valuation of European Calls: the Bachelier–Black–Scholes Formula and the Greeks
      5. 4.5 The Merton (1973) Formula for Dividend-paying Stocks
      6. 4.6 Options on Commodity Spot Prices
      7. 4.7 Options on Commodity Futures: the Black (1976) Formula
      8. 4.8 Monte-Carlo Simulations for Option Pricing
      9. 4.9 Implied Volatility, Smile, and Skew in Equity Option Markets
      10. 4.10 Volatility Smile in Agricultural Commodity Markets
    11. Chapter 5: Commodity Swaps, Swaptions, Accumulators, Forward-Start, and Asian Options
      1. 5.1 Swaps and Swaptions
      2. 5.2 Accumulators
      3. 5.3 Forward-Start Options (or Calendar Spread Options on the Spot Price)
      4. 5.4 Asian Options as Key Instruments in Commodity Markets
      5. 5.5 Trading the Shape of the Forward Curve through Floating-strike Asian Options
    12. Chapter 6: Exchange, Spread, and Quanto Options in Commodity Markets
      1. 6.1 Exchange Options
      2. 6.2 Commodity Spread Options and their Importance in Commodity Markets
      3. 6.3 Commodity Quanto Options
    13. Chapter 7: Grain Cereals: Corn, Wheat, Soybean, Rice, and Sorghum
      1. 7.1 Introduction
      2. 7.2 Corn
      3. 7.3 Wheat
      4. 7.4 Soybeans
      5. 7.5 Rice
      6. 7.6 Sorghum
    14. Chapter 8: Sugar, Cocoa, Coffee, and Tea
      1. 8.1 Sugar
      2. 8.2 Cocoa
      3. 8.3 Coffee
      4. 8.4 Tea
    15. Chapter 9: Cotton, Timber and Wood, Pulp and Paper, Wool
      1. 9.1 Cotton
      2. 9.2 Lumber and Wood
      3. 9.3 Pulp and Paper
      4. 9.4 Wool and Cashmere
    16. Chapter 10: Orange Juice, Livestock, Dairy, and Fishery
      1. 10.1 Orange Juice
      2. 10.2 Livestock
      3. 10.3 Dairy
      4. 10.4 Fish Markets
      5. 10.5 Poultry and Eggs
    17. Chapter 11: Rubber, Palm Oil, and Biofuels
      1. 11.1 Rubber
      2. 11.2 PALM OIL
      3. 11.3 Ethanol, Biofuels, and Biomass
    18. Chapter 12: Land, Water, and Fertilizers
      1. 12.1 Land Types, Yields, and Erosion
      2. 12.2 Fertilizers
      3. 12.3 Water and Its Crucial Role in the World Economy
      4. 12.4 Projections for the Future of Agriculture
      5. 12.5 Subsidies and Export Bans
      6. 12.6 Market-Oriented Farming
    19. Chapter 13: Infrastructure and Farming Management in the Digital Age
      1. 13.1 Introduction
      2. 13.2 Agricultural Infrastructure
      3. 13.3 Country Risk: The Example of Ukraine in 2014
      4. 13.4 Analyzing the Risks Involved in an International Wheat Tender Offer
      5. 13.5 Weather Risk and Weather Derivatives
    20. Chapter 14: Investing in Agricultural Commodities, Land, and Physical Assets
      1. 14.1 Purchase of Commodity Futures
      2. 14.2 Purchase of Commodity Options and Structured Products
      3. 14.3 Commodity Index Investing
      4. 14.4 Investing in Commodity-Related Equities
      5. 14.5 Investing in Land
      6. 14.6 Acquisition of Infrastructure and Physical Assets
      7. 14.7 Conclusion
    21. Glossary
    22. References
    23. Index
    24. End User License Agreement