Non Technical Summary
This project seeks to establish an innovative and evidence-based framework for graduate training in Commodity markets through integration of traditional classroom learning with participation in a student-managed commodity investment fund with a portfolio of almost $1 million. A student managed commodity fund provides an opportunity for participating students to apply the concepts that they learn in the classroom to real life trading experience. Students' exposure to real markets engenders highly valuable problem-solving and decision-making skills relevant to modern agricultural industry. Moreover, these students have to present and defend their trading recommendations in front of their peers (of varying academic backgrounds) on a regular basis, helping them to develop effective presentation and communication skills. Most importantly, the program is managed by students, therefore, they take an active role over their education and develop leadership and management skills.Our early evaluation efforts demonstrate that as a result of the training and trading activities described above, COINS members develop technical competencies in market and price analysis, risk management, econometrics, data analytics, and international trade and policy, as well as an array of soft skills. The multidisciplinary nature of our program allows our members to benefit from network externalities and enriches the group as a result. The employment record of COINS graduates to date indicates that our program is uniquely suited to train professionals to meet the future needs of a globally interconnected, technologically advanced, rapidly diversifying and stakeholder-driven food and agricultural industry.The educational value of this program has been recognized by the Virginia Tech Foundation who provide an investment fund of almost $1 million for our students to invest. Our participation in NNF program will enhance and expand traditional training approaches and will help fill an identified shortage of experts in the commodity market field within the Agricultural Management and Economics TESA through a targeted integrated training program. Moreover, we will be able to reach underserved and underrepresented groups within the profession.
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Goals / Objectives
The overarching goal of this project is to expand and enhance graduate training in commodity markets through an integrated program that combines traditional graduate training with a multidisciplinary experiential learning program, Commodity Investing by Students (COINS) at VT.The specific objectives of this project are to:1) recruit 4 outstanding students (2 MS and 2 PhD) to pursue and complete graduate degrees inthe Agricultural and Applied Economics department while participating in COINS program;2) provide integrated training by combining traditional coursework focused onAgricultural Marketing and Management, Data Science and International Agriculture andexperiential learning through an interdisciplinary COINS program;3) engage graduate fellows in research projects associated with commodity markets;4) provide mentoring, networking and professional development opportunities through COINSand Graduate Student Association (GSA);5) measure the impact of this integrated approach to training in commodity markets ongraduate student education and employment opportunities.
The unique feature of our program is that it integrates traditional academic training in Agricultural and Applied Economics with experiential learning opportunities available through the COINS program. By pursuing this integrated graduate degree, directly related to Agricultural Management and Economics (TESA #5), the four graduate fellows supported by this project will obtain knowledge and skills highly desirable in a modern workplace. This project's emphasis on commodity markets also relates to the field of Agricultural Marketing and Management, highlighted as a relevant discipline for this funding cycle. It also supports the field of International Agriculture due to the global nature of commodity markets and the field of Interdisciplinary programs due to interdisciplinary nature of the COINS program.The graduate curriculum in Agricultural and Applied Economics at Virginia Tech offers a lot of flexibility to our students to select different fields of study in addition to the core coursework. For example, most of our graduate students interested in commodity markets opt to take coursework in price analysis and futures and options as well as data analytics and statistics in addition to core courses that include microeconomics, econometrics, and math programming. Thus, while this program's main focus is on Agricultural Management and Economics, it has the potential for positive spillovers to the Data Science TESA as well.In addition to coursework associated with degree requirements, all new members of the COINS program are required to go through a rigorous training process aimed at increasing their knowledge and analytical competencies. A special class, Commodity Investing by Students (AAEC 4434) was designed to provide commodity market training for all new members from different academic backgrounds. Under the guidance of Drs Massa (PI), Stewart (Co-PI), and Spicer, the course is delivered using a hybrid approach (both online and in-person) and offers a deep dive into the Fundamentals of the Agricultural, Energy, and Metals market. Moreover, students are exposed to a few traditional forecasting methods that will prove useful as they conduct market research relevant to creating their trade theses. The expected time commitment for COINS members is around 10-15 hours per week divided between market research and analysis and in-person meetings.Upon completion of initial training with a B or higher, new members are promoted to analysts and obtain access to trading commodities. Experiential learning is the centerpiece of the COINS program as the student members actively manage a $1 million commodity investment fund. The goal of COINS is to beat the benchmark (Bloomberg Commodity Index) by actively managing these funds and continuously updating the commodity allocations by as much as 30% over or under the benchmark weights, based on investment guidelines. Trading decisions are made during weekly trading meetings attended by all student members and faculty advisors. A trade proposal to take a position in the market is prepared by the respective commodity analyst(s) and approved and forwarded by the division head to the CEO to be included in the agenda of the weekly meeting. The analyst(s) present their proposal to the group following a specific format that includes trade description (long or short) and size, type of order, current and desired position relative to benchmark, accompanied by a rationale that consists of a combination of fundamental and technical analysis. If a trade proposal is approved by a majority vote during the trading meeting, a trade is executed immediately by our portfolio manager.Furthermore, the majority of COINS students earn practical experience through internships with top agribusiness companies, such as Smithfield Foods, Perdue Agribusiness. JBS, Cargill and Intel FCStone, financial companies, such as Bank of America Merrill Lynch, City Bank and Wachovia and energy companies such as British Petroleum and Exxon Mobil. The overall goal of all these experiences is to develop skills in commodity market analysis, investing and price risk management which is directly related to the TESA of Agricultural Management and Economics in the field of Agricultural Marketing and Management.