In many studies the assumption is made that traders only encounter one type of price risk. In reality, however, traders … more than one type of price risk. The traditional method of estimating hedge ratios by Ordinary Least Squares (OLS) is … results in a significant reduction in price risk for grain traders. The results also confirm that the unique, but …

alternative to expected utility theory. Conventional theory posits that the optimal hedging position of a producer is not affected … producer is affected by changes in futures price levels. The implications of this price-induced hedging behavior on spot prices …

Futures markets provide an important outlet for commercial traders to hedge their price risk; in turn, hedgers … the wheat contracts on the Chicago and Kansas City exchanges. In Chicago, we find stable levels of incremental hedging …. Additionally, hedging participation has declined in recent years, coinciding with the commodity price boom. In the Kansas City …

In this study stylized gasoline blender’s optimal hedging strategy in the presence of ethanol mandates is analyzed. In … incentives would affect blenders’ optimal hedging strategies. Multicommodity hedging method with Lower Partial Moments hedging … criterion as a measure of downside risk is utilized in obtaining the optimal hedge ratios. Based on the obtained results, the …

Previous studies identify limited potential efficacy of weather derivatives in hedging agricultural exposures. In … temperature contracts that better weather hedging opportunities exist at higher levels of spatial aggregation. Aggregating … production exposures reduces idiosyncratic (i.e. localized or region specific) risk, leaving a greater proportion of the total …

to past experience. This may assist with making decisions about selective hedging. Likewise, historical evidence may be … useful in evaluating expected returns from the use of put options. Results from simple hedging strategies using either …

by meeting specific market demands while assessing the reasonable risk associated with bio-energy production for an area …, reducing the production risk and enhancing the competitiveness of bio-energy products. Gasifying biomass is a feasible way to … key components for dealing the risk and commercializing bio-energy products in long term. …