Why margin evaporates
A buyer contracts grower deliveries and offsets price risk on an exchange. Valued in separate spreadsheets, the physical position and the paper hedge drift apart, and the real margin is unknown until settlement nets advances, shrink, quality discounts, and the closed hedge.
Value the position and the hedge together
Mark-to-market, the current price less the contracted price across the open position, shows unrealised profit and loss daily, not after the fact. The hedging mechanics sit on exchanges like CME. Net realised margin per tonne is what reaches the books once discounts and the hedge are applied.
Where the ERP closes the loop
On Hudace, contracts, physical inventory, and hedge positions share one ledger, so mark-to-market and basis compute continuously instead of in spreadsheets. Xenon AI flags contracts whose basis or quality threatens booked margin and drafts settlement statements from scale-ticket and grade data.
A trader or settlement clerk approves every hedge and settlement. AI never places a trade.
The numbers to watch
Value the physical and the hedge as one position.
Mark-to-market position
(Current price - contracted price) x open quantity. Unrealised P&L, daily.
Net realised margin per tonne
Settlement value less cost and hedge result, per tonne. What hits the books.
Basis exposure
Open position exposed to basis movement. The risk between contract and settlement.
Unsettled contract value
Value of contracts awaiting settlement. The working position to watch.
See protected margin on Hudace
Talk to our team about valuing contracts, inventory, and hedges on one ledger.