iRely Blog

Where do I stand?

Written by Philip Rolsten | May 21, 2019 at 1:42 AM

What is it they say about the best-laid plans again? 2019 is the definition of plans gone awry. From trade disputes, to what appears to be a 6th Great Lake forming over the mid-west, this year has something for everyone!

After the 4” rain we had the other day, a farmer at church asked me if we got any rain, I said, “It’s damp…”. We are adjusting to a market that has no hunger for a soybean crop and a farmer whose window is closing for corn planting, with no incentive to plant soybeans. In the midst of all this, here you sit, yes you, sympathetic to both sides yet far from a tractor seat or a politician’s desk. You are left to answer the biggest question yet, “Where do I stand?”.

I don’t mean in the literal sense, nor the figurative “muddy middle” that is grain trading.  No, I mean where do you stand financially? Between non-performance issues and excess drain on the operating line from volatile markets, do you know where you stand? I mean, exactly where you stand? Sure, you do, at months end at least (not that the daily margin calls aren’t a constant reminder). With whom do you have the most risk? Can you accurately estimate your potential future exposure?

Do I sound like your banker… wait, don’t answer that!

I’ve heard it said that a bank is a place that will lend you money, only if you can prove you don’t need it. In seasons like this, it seems the banker will want to chat a bit more than usual. The key is being prepared to answer questions and put their minds at ease. You know what they say, “A happy (wife) banker, is a happy life!”. You need accurate, timely, and detailed information for your operations. This information needs to be verifiable and accessible at a moment’s notice.

Software systems tend to be a repository and less of the analytical tool that you so desperately need. Cue the Excel spreadsheets! No amount of color-coded, macro enabled, pivot table producing, spreadsheets can make up for the fact that when you need answers, you need them now. You need easy to produce, up-to-the-minute data, and the ability to forecast downstream. If action is required, it can’t always wait until month end.

i21 can quickly provide an up-to-the-minute, easy to compile Mark to Market. A mid-month, any day of the week and twice on Sundays, accurate P&L at your fingertips. With the ability to stress test your current book of business, you can forecast whatever the market may bring. Providing visibility into your counter-party risk, you can see where the action is needed daily… and act. You’ll know how much and with whom you hold the most risk. You’ll know what percent that risk is to your business. You’ll know exactly where you stand and where you could be standing (and so will your banker).