Demo Meridian Commodities: commodity-trading day

Demo Meridian Commodities trades coffee, grains, and base metals between East Africa, the Gulf, and Europe. It buys physical lots, stores them in third-party warehouses, prices contracts against published indices, hedges futures exposure, settles quality claims, and reports inventory, derivatives, and margin in USD and EUR. OSERP connects trade contract, lot, warehouse warrant, quality, shipment, hedge, provisional invoice, settlement, and finance.

1. Create contracts, counterparties, and price formulas

Counterparty profiles store legal name, commodity licence, tax, bank, credit limit, sanctioned-country result, settlement currency, and status. Trade contracts record buy/sell direction, commodity, grade, quantity, origin, destination, Incoterm, pricing index, differential, pricing window, tolerance, currency, payment terms, and approval.

Field	Demo value	Impact
Contract	MC-COFFEE-2609-14	Trade and settlement key
Commodity	Arabica coffee	Lot and quality rules
Quantity	120 tonnes	Commitment and position
Index	ICE Coffee C	Final price basis
Differential	USD +85/tonne	Contract margin
Currency	USD	Invoice and hedge
Origin	Ethiopia	Customs and quality
Destination	Jebel Ali	Logistics and ownership

Contract versions preserve quantity, price, and delivery amendments. A counterparty above credit limit requires approved exposure override.

2. Receive, grade, and warehouse physical lots

Receipt tickets store contract, supplier, truck/container, weight, origin, warehouse, warrant, date/time, and status. Quality results record moisture, defects, grade, laboratory, sample, instrument, and disposition. Lot records store quantity, UoM, cost, owner, bin, warehouse fee, and quality status.

A shipment weighs 120 tonnes, but quality accepts 118.8 tonnes after foreign-material deduction. The contract settlement shows gross weight, accepted quantity, deduction formula, and supplier notice. A rejected lot is quarantined and cannot be sold or pledged.

3. Price provisionally and settle final value

Provisional invoices record contract, lot, quantity, provisional index, differential, currency, tax, payment, and open-pricing status. Final-pricing events store index publication, pricing date, final price, prior amount, true-up, approver, and customer notice.

At provisional USD 2,250/tonne, 118.8 tonnes value USD 267,300. When the final index is USD 2,340, the USD 10,692 true-up is an adjustment linked to the original invoice. Never edit the provisional invoice’s historical price.

4. Manage shipments, warrants, and title

Shipment headers store contract, carrier, vessel, container, bill of lading, origin, destination, Incoterm, insurance, currency, ETA, and status. Warehouse warrants record lot, owner, quantity, lien, issue/expiry, transfer, and release condition. Title transfer records event, date, document, buyer, quantity, and approval.

Partial delivery reduces open quantity and updates in-transit stock. A bank or lender lien blocks release until authorised. Demurrage and storage charges link to warehouse statement, days, tariff, and customer responsibility.

5. Hedge futures and mark to market

Hedge records store instrument, exchange, contract, commodity, volume, price, currency, maturity, broker, designated exposure, hedge ratio, and approval. Daily mark-to-market stores settlement price, prior value, current value, variation margin, collateral, and journal.

A USD 250,000 futures position offsetting physical coffee exposure posts unrealised gain/loss according to the configured hedge policy. Margin calls store broker, amount, currency, due date, bank, and allocation. A hedge cannot be designated after the exposure period without documented policy.

6. Settle quality claims and counterparties

Claim records store contract, lot, buyer/seller, quality result, quantity, amount, currency, surveyor, reserve, evidence, and status. A contamination claim creates credit or recovery assessment and keeps original inventory and invoice history. Counterparty statements show purchases, sales, provisional amounts, true-ups, claims, payments, and balance.

Payments record bank, value date, currency, fees, reference, allocation, and status. Duplicate bank references are idempotently rejected. Unapplied receipts remain owned and aged.

7. Track warehouse fees, financing, and costs

Supplier invoices record warehouse, storage days, handling, inspection, insurance, currency, tax, contract, and approval. Financing records lender, facility, drawdown, interest rate, fees, collateral, currency, and maturity. Cost allocation separates purchase, freight, duty, storage, financing, quality, hedge, and sale costs.

Budget and position dashboards show physical quantity, sold quantity, open purchase, open sale, in-transit, warehouse, pledged, hedged, priced, unpriced, exposure, and margin.

8. Multi-currency and trade close

Physical contracts may settle USD, European buyers EUR, and local costs ETB, AED, or KES. Each contract, invoice, true-up, receipt, warehouse bill, margin payment, and claim stores transaction rate, source, timestamp, realised FX, and revaluation status.

Close reconciles contracts to lots, lots to warrants, shipments to title, provisional prices to final indices, hedges to exposures, warehouse statements, claims, financing, counterparty balances, tax, FX, and GL. Trade snapshots retain market data source, valuation time, model, reviewer, and approval.

KPI	Before OSERP discipline	After OSERP discipline	Improvement
Lot-to-contract traceability	92.1%	99.8%	+7.7 points
Provisional-price true-up cycle	18 days	5 days	72% faster
Hedge exposure accuracy	87%	97%	+10 points
Warehouse reconciliation	9 days	2 days	78% faster
Trade close	16 days	5 days	69% faster

Practice challenge

Create a commodity contract, receive and grade a lot, issue a warehouse warrant, post a provisional invoice, record a shipment and title transfer, designate a futures hedge, mark it to market, calculate a quality claim, process a final-price true-up, settle an EUR buyer, revalue local warehouse costs, and close the trade period. Explain every field, status, formula, permission, journal, tax result, API identifier, exception, and audit event.

Related: Inventory field guide, AR Invoice field guide, AP Invoice field guide, Bank Reconciliation field guide, and API cookbook.