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cleanFiles/bookmap_SAP_Commodity_Management_Solution_for_Oil__en-US_learning-sap-com_lsc-prod.zip (MMCP-DROPZONE) - 2025-03-17T13:06:31.000Z

Analyzing Commodity Market Quotation

<div id="content"><div class="parentsection"><div class="section"><div class="kalturaVideoLessonWrapper"><div aria-label="" class="kalturaVideoLessonContainer" data-testid="video" id="1_j2tgfi9o"></div></div></div></div><div class="parentsection"><div class="section"><div tabindex="0"><h3>Lesson Summary</h3></div><div class="formalblock"><p tabindex="0">In this video you've learned:</p></div><ul style="list-style-type:disc"><li tabindex="0"><strong>Manual and Automated Price Entry:</strong> Enter prices manually or upload via Excel and data feed interfaces using transaction codes like FDC 17.</li><li tabindex="0"><strong>Price Interfaces and Data Feed:</strong> Utilize price interfaces for efficient data management, integrating with external systems for seamless price acquisition.</li><li tabindex="0"><strong>Basis Pricing Adjustments:</strong> Apply basis pricing for location, quality, and transportation differences, enhancing accuracy in commodity pricing.</li><li tabindex="0"><strong>Currency and Decimal Precision:</strong> Define currency settings and decimal precision for accurate financial transactions and reporting.</li><li tabindex="0"><strong>Historical and Quality Data Tracking:</strong> Monitor historical price data and quality metrics to ensure comprehensive and reliable pricing information.</li></ul></div></div></div>

Commodity Market Quotation

SAP Commodity Management Solution for Oil & Gas and Metals & Mining

SAPIndustry_Day1_Part3.mp4

As I was saying, I think we do also have, these are the options right now where you can enter your prices. One is, of course, manually through the T-code, FDC-17. One is upload from an Excel file and data feed, which is, again, price interfaces. So if you move to next screen. So we already spoke about, we saw this screen, FDC-17 is the T-code, and you would be able to just add prices manually, a one-by-one or, you know, copy-based on certain parameters. But, yeah, this is a manual thing. And most of the times, because since there's so many prices available, we always end up using price interfaces. But before we have price interfaces design, this is a tool we can use always to store prices. And next slide. You can also see what was the yearly high and the historical high. So this is another feature which is available within this ABC 17D code. Right. The history and quality we already spoke about that. Yeah. And based on, you know, like in this case, if this was a forward, forward index type, DCSID, and specifically, like, let's say, LME future or LME contract, you can have different period types, like yearly prices, quarterly prices, monthly prices. That applies for some of the manual prices also, right? The various freight charges or something we have seen, but the prices can be configured accordingly like this. We'll talk about this more during our CPE pricing as well, but you can achieve that level of details also. And below screen talks about storing prices for options. So for options, it's just not the price, but there are two main characters or parameters which are required. One that shows whether it is a call or a put and the strike price. because prices for options are always defined based on these two parameters and not just based on commodity and MAC. So this is the tool part of, again, treasury and risk management. So before commodities, you could use this tool to even upload your FX rates, interest rates, and so on and so forth. But SAP has provided the functionality to upload DCS prices as well. It's the same functionality. And the F1 documentation provides basically most of the information on how you would want to upload prices. So it shows you here a step in this slide as well. You create first, I mean, select the download parameters. You can even first download existing records. It will give you the file with those records and then, you know, just change and re-upload again if you would like to. So you have the option to do that as well. So the T-Code for this is T-B-E-X-N, T-Bax-N. And what Nikol was saying here to download is there is a specific format of the file that needs to be used to upload the prices so that it gets uploaded correctly in FDCA-17. So the best way is to download one file so that you have the parameter, and then you can update the file as per the new prices and then upload it and keep the file for future uses so once you open up or click on that create button it will basically open this screen you will have to allow macros in your excel sheet basically basically for this to show otherwise it won't open up it rather opens excel directly in your system so this is the f1 documentation on the right side It shows for DC space what each field of in the Excel sheet needs to be, like key one, key two, date format, time format, if you have, and so on and so forth, right? So you have to specifically follow this format to upload your, upload your prices and the system would, and it even shows you. if the prices are successfully uploaded in the same screen, it will show you whether the price uploaded successfully or it had any errors. Yeah, and as I was saying, the last option is always to use a price interface. I mean, the third option, not so SAP, basically treasury and risk management also have the standard functionality for data feed. So you can use that. Basically, but that data feed also, I mean, you have various conversion tables in that node where you have to maintain mappings of DCSIDs and what the basically source and target conversion information, basically, to acquire a price successfully. But also, again, you can also create your own Z tables or, you know, if you have a third layer of application in between. like SAPPI or anything, so you can maintain the transformation at that level as well. We also have various poppies where you can directly use. I mean, ultimately this functionality uses the same thing, but it's quite flexible the way you would like to design the price interfaces. And most of the times the clients have their own data. moderator systems like the different data model systems like Morning Star and whatnot. So this can also get integrated with those data moderator systems so that it gets the prices from them. So those data moderators does the job of pulling the prices from Platts, Argus, CME, all the different providers. And cleans the data and put the data in a format that we can pull in that. so that is possible as well yeah I think we spoke about this right so yeah this currency units it's same concept what you see and your FX rates right you have currency units for different decimals if you want for example the example given here is per cent or per dollar so this is the same this is the same concept here there is nothing different here and this is the central currency space where the currencies are determined and you can determine the currency is based on how many decimal places or what accuracy you want with the customers for example most of the times we have seen with different customers that they use six decimal places of accuracy for more accurate data, more accurate values. So we can create different currencies like we have US cents. We can also create US something which is valid for six decimal places. And the normal ratio set up for currencies does the set up that how these are related. I mean, one is to one or one is to 10, six, five decimal places. So we can define the different currencies. and effects rates come into play. Or you can also say, OK, USCT is a child of USD. So there's no effects conversion happening between USCT and UST. That's how the CP can understand. The currencies are defined, but they are same. So I would say 2.560s to 6 decimal places is equal to 2.56 UST, which is to two decimal places. So these are one-to-one relations. And I think we spoke about this. Right. So we spoke about history and quality. So this is the same information here as well. Yeah. And in quality, you can see for a particular TCS in particular period, if all the prices are available, you will see 100% availability. If none of the prices are available, you'll see 0%. So it gives you that quality. And if something is missing, then it will go red, and the percentage changes. So that's how you can see the quality of DCS-MIC prices. So it's basically any missing prices in the system. If you want to check, you can check with this. Let's move to the basis pricing. So what we've covered using the DCS-MEC and price type is the future prices, which have been published by Reuters or any publisher, like Spot or Future Prices. Along with that, we also have a kind of price which is called the business pricing. For instance, due to the difference in locations, due to the difference in time or quality, there can be an adjustment on top of the futures. So any adjustment to the future published prices is is done using a basis pricing. In ACM world, we see elevator differences, like there can be location differences. In oil and gas, we can have rack prices for instance. For instance, from marketing and supply to the gas stations, there can be a difference in prices. So basis prices come into pictures, adding additional value on top of the futures prices, right? So one example is the location differences. For example, if C-Bot is publishing a price of wheat winter, that is publishing the futures prices based on a certain delivery period at a certain location. Or in case of oil and gas, for example, WTI, the published prices are based on the certain quantity or quality of the oil. at a certain location like Oklahoma is based on that delivery location. So if there is a change in location, instead of Oklahoma, we are going to Texas, we are going to the California West Coast regions or to the Gulf Coast regions, there can be a change in prices because the location is different and there can be additional charge for the transportations and different pipeline transportation or truck transportations that can be different additional costs right so these are adjusted by using a basis pricing so this is an example of basis pricing where the locations are different so the basic concept of basis pricing i think should be clear because um it's also used most commonly in the acm world so these are different um this is a common business scenario but we don't need to get into this right now so like i was explaining our basis pricing gets added to the top on top of the futures prices to come up with the cash price at that time at that location right and these are the different formulas how you what you can say that a basis is the cast minus futures or the future is the cast minus basis And we always saw that this adjustment can be due to any freight, any storage cost. For example, in any of the elevator, if there are storage of wheat or corn, that cost can also get implied on top of the futures prices. If there is any adjustment on quality factors, then that gets added on top of the futures prices, right? So these all are covered using basis pricing. And in SAP, we have utilized, I mean, we have brought in the basis pricing in the same commodity management space, which is slightly different than the DCS-based market data. In this, we do not have the DCS, I mean, it can be related to DCS, but these are not market or not exchange published prices. So this is the same stuff what we discussed. OK, so this is important slide for a basis ID and basis pricing. So we have seen the basis market data is nothing but other prices, the different basis prices, right? And to capture these prices, we create a basis ID. A basis ID can be a user created ID, like it can be WTI at CA or SRW at Cancels or any other location. You can create basis ID as per the requirement of the client. And this basis ID works in conjunction with the basis type and basis category. Now, what are these? In the business category, we can define what kind of basis we are going to use. It can be location differential. it can be afraid differential it can be quality differential that's what we determine in the category what is the category of the differential then in the basis type we can also add additional layer saying okay in case of location differential what kind of differences are we going to use whether it's going to be internal or external for example we can use external for our settlement settlement purposes, like for customers and vendors, we can use this kind of basis type, which is external, which goes out in the invoice and on the deals. However, the internal ones can be used for your mark-to-market calculations, and you can have two different prices for each. So using basis type, for the same location differential, you can have two prices saying that, okay, external I want to add $0.2 per bushels, And for internal, I want to use $0.3 per bushels. Okay, so I'll take it as no. And then we have a basis ID creation. Then we have the basis market data prices. So the prices for basis market data is stored in, we'll see further, is stored in transaction FDCS17B, B agent basis, and you can create the basis ID using FDCS 1818. And let me see if we have additional screen to show this. Otherwise, I can quickly show this in this system. OK, this is the prices. Here, you have the basis category. And you have the basis type and basis ID. And the DCS and make and price step can be defined based on the basis type, whether it's relevant for DCS or make or not. not. So what, like I said earlier, a basis type can be defined whether it is based on any DCS or make or not. So here we have created one basis category which says, okay, this is a primary basis which is added on top of the primary prices, which is referring to the exchange. And this is based on a DCS and make. We can also have not based on any basis or make, but in this system, this basis category was based on a DCS and make. This derives how the prices are being set in the system and how you want to work with the prices in the documents in the logistics documents. There can be others like here, which is a secondary basis for transportation, which is not based on any DCS and make. You can also define your default currency so that it popules automatically in the every CS7. in B transactions. In the basis type, it's a fairly simple setup where you can say, OK, my basis type is, this is for external, which is going to the customers and the vendors. And this is related to 100, which is the primary basis. So this is this basis type is a primary basis for externals. And similarly, this is the primary basis for internal. and this is what we just saw in the slide what a basis type stands for and let me show you I have one more screen on basis prices this is how you define your basis ID this is internal recipe system so there can be different namings and different IDs created but like you can can see the nomenclature depends completely on how the user or the client wants it to be, how they want to set up the basis ideas. And they are different decimal places, just like the DCS ID, it's up to 14 decimal places. And if I see one C in mine, then it's fairly simple setup where you just define the description and the currency and the decimal places. That's it. And this basis idea is being used in quotation rules. We'll see it tomorrow when and how the quotas and rules comes into play. But the basis prices, you can see that it's something like this. Let's show if you have this. This is B. No. Oh, sorry. at my bag. Yep. So you can see these are how the prices are being set up for basis ideas. You have also seen how the prices or the structured differs based on the DCS based market data or listed options of the forward indexes. And so it does for the basis ideas. You have the start and end date where you can determine the periods. It can be one year period or one month period. and you define the quotasin prices, right? For the basis ID and the price basis type. And whenever the quotation rule is used in any logistics document, this determines what is the price that's going to be pulled up. Okay? And you can also have the historical data for any date of price. So it's pretty much the same.