The StoneX Client Education Philosophy

For procurement professionals, the past few years have presented a series of challenges: soaring agricultural commodity prices, historic volatility, and rampant inflation have combined to undermine even the most carefully constructed budgets.

These extreme price swings can lead to devastating consequences for businesses – eroded margins, earnings misses, loss of revenue and even product shortages. It’s left many companies urgently searching for solutions to insulate themselves and from the chaos.

At StoneX, our 100-year legacy in the commodities markets has taught us a two-pronged approach to educating our clients on managing risk and maximizing value in any market environment.

Locking in value during “normal” markets

When prices and volatility is low, opportunities can emerge to secure favorable pricing for the long-term -- not just for immediate needs but 12-18 months out on the curve.

Rather than simply sourcing at spot prices for immediate needs, our experts will work closely with you to forecast usage further out. Then, using a combination of financial strategies such as futures contracts and customized OTC products, we can secure a significant portion of your commodity needs at value levels.

When commodity prices are at their low end of their historical range, we help businesses lock in that value and get low priced coverage for years in advance. These timely, strategic purchases can help drive significant cost savings compared to being fully exposed to spot price volatility. You never know when the next commodity or geopolitical crisis happens. We want to lock in value during times of adequate and burdensome levels of supply.

Protecting budgets during volatile markets

Of course, the commodity markets don’t stay calm forever. Whether it’s unexpected disruptions of wheat from the Russia-Ukraine conflict or shocks in energy prices, procurement professionals need to be prepared for sudden spikes.

In natural gas for example, prices have dipped below $2. Savvy buyers are looking for out on the curve, layering in pricing for the next 12-18 months. This protects margins and prevents procurement teams from getting squeezed should prices spike as supply tightens.

When price volatility strikes, StoneX equips clients with powerful tools below to protect budgets and maintain flexibility, tailored to your business and your specific risk profile

• customized over the counter (OTC) structured products
• exchange listed options and exotic option strategies
• embedded hedge structures in physical contracts that sync with GAAP accounting

These financial instruments act as a shield, allowing you to set a ceiling on costs and prevent your budget from being devastated by sudden price swings. Most important, they leave room for you to participate should markets reverse downward.

By deploying these strategic tools, StoneX can help you from getting caught off-guard by extreme price volatility. You’ll be able to navigate with confidence, knowing you have a trusted partner dedicated to helping you manage risk while maximizing margins.

Partnering with StoneX for results

Managing commodity risk has never been more challenging. Structuring an effective hedging program requires extensive data analysis, market expertise, and the ability to build customized financial solutions.

As a leader in agricultural commodities, StoneX offers unmatched expertise to help you control costs and protect your budget. Our risk management experts will become an extension of your procurement team, delivering:

• Comprehensive risk assessments to identify cost saving opportunities and prepare you for market swings
• Robust and flexible financial tools such as futures, options and customized OTC products
• Access to real-time market intelligence to keep you one step ahead of the markets
• High-touch consulting with a focus on data to drive your hedging decisions, with a focus on budget targets, historical value, fundamentals, technicals, seasonality and more
• Decades of boots-on-the-ground expertise across ag, energy, metals and other core commodities

In this uncertain market environment, resilient budgets and margins are only possible with the right partner you can trust.

This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand the risks prior to trading. Past results are not necessarily indicative of future results. All references to and discussion of OTC products or swaps are made solely on behalf of SXM. All references to futures and options on futures trading are made solely on behalf of SFI. SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.

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