CASH AND FUTURES PRICE RELATIONSHIPS FOR NONSTORABLE COMMODITIES: AN EMPIRICAL ANALYSIS USING A GENERAL THEORY

Empirical analysis examines the presence of basis risk, speculative component, and expected maturity basis component in basis relationships for nonstorable commodities. The results indicate that all three above components exist in both cattle and hog markets. The basis risk and speculative components vary across contracts. Hog markets showed seasonality, which helps explain the hog basis more accurately. Flexibility in making the marketing decision strengthens the explanation of intertemporal price relationships for both cattle and hogs beyond that previously attributed to only feed prices.


Issue Date:
1988-12
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/32106
PURL Identifier:
http://purl.umn.edu/32106
Published in:
Western Journal of Agricultural Economics, Volume 13, Number 2
Page range:
327-338
Total Pages:
12




 Record created 2017-04-01, last modified 2018-01-22

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