Quartzite Precision Marketing
Quartzite Precision Marketing (QPM) is for producers who want a disciplined and flexible hedging strategy for their grain business.
Grain and soybean marketing is challenging. At Quartzite Risk Management LLC (Quartzite), we love helping our clients tackle that challenge. We designed QPM to handle the two factors that most complicate marketing grain and soybeans. QPM uses a modern option strategy that adapts to uncertain production while accounting for how price and yield generally move in opposing directions.
Hedging an uncertain production requires a strategy that works for a wide range of yields. We designed QPM with that need in mind. We start by encouraging our clients to consult with a crop insurance agent and consider an insurance policy that ensures a minimum yield. With this protection in place, producers should feel comfortable committing a portion of insured production to forward contracts, futures contracts, or feed. Then, to manage the remaining exposure, we use a flexible option strategy and modify it throughout the growing season as market conditions change. To adjust for changing yield expectations, we schedule a weekly call with each of our clients to discuss their crop's progress.
The other primary challenge to hedging grain and soybeans is that price and yield usually move in the opposite direction. Because of this, producers tend to find themselves with greater market exposure when prices fall and less when they rise. This tendency makes hedging tricky and often leaves producers in an uncomfortable state of indecision. That discomfort puts producers on their heels, preventing them from making marketing decisions as markets move. Worse yet, this discomfort can lead producers into the emotional trap of selling low and buying high. QPM is a disciplined strategy designed to help producers avoid this trap.
QPM’s strength is that it leaves predicting market direction to the speculators. While we think speculating has its place, we don't think it's a useful strategy for most producers. Rather than guess where prices are going, we choose to look at more tangible things. While we can't touch price risk or hold it in our hands, modern financial tools give us a yardstick to measure it. Once we measure price risk, we can begin to hedge it.
We designed QPM using modern financial tools and technology to create a disciplined, flexible hedging strategy for grain and soybean producers. You're already using technology to plant, tend, and harvest your crop, so why not use our modern technology to market it?
Quartzite wants its clients to be confident in their hedging strategy. To stay consistent with that idea, we use a per-acre fee structure. Charging by the acre best matches our interests with our clients - we want you to come back next year. Our fee structure should make you confident that we've got your best interest in mind, not monthly contract quotas or lopsided performance incentives.
We know there is no perfect strategy. There is always room for improvement, and there is risk in everything we do. At Quartzite, we are continually seeking to improve our tools and tactics to find more effective ways to manage risk. We don't believe in "good enough." We work hard to improve because we always want to be better, just like you.
We're experts in today's hedging and marketing tools. Quartzite knows what it takes to navigate modern markets. If you're curious about working with us, fill out the form below. Better yet, give us a call to see how we can help you.