Hedging the Unhedgeable
The Problem
Most agricultural commodities lack liquid futures markets. Durum wheat trades differently than soft wheat. Processing tomatoes move independently of other vegetables. Stone fruits, specialty grains, and regional produce variants have no exchange-traded instruments for price protection.
Producers and traders in these markets face price volatility with limited options: accept the risk, use poorly-correlated proxies, or exit the market. None of these is acceptable for serious operators
Our Approach
Cottonext develops custom risk management frameworks using a combination of: proprietary pricing models built on historical data and regional market dynamics; structured OTC instruments tailored to specific commodity profiles; cross-hedging strategies using correlated assets where direct instruments don't exist; and technology-enabled monitoring systems that track basis risk and execution quality.
Markets We Cover
Specialty Grains: Durum wheat, specific wheat varieties for milling, specialty rice
Processing Vegetables: Industrial tomatoes, canning vegetables, dehydrated produce
Fresh Produce: Stone fruits, citrus, table grapes, seasonal vegetables
Regional Commodities: Cotton seed, olive oil, specialty oilseeds
Who This Is For
We work with agricultural trading companies, large-scale producers, food processors, and cooperatives who require sophisticated risk management but operate in markets that traditional financial services firms ignore.