The basis, defined as the cash price minus the futures price, is important when making marketing decisions. The cotton basis is calculated using the July futures price for six major cotton marketing regions in the U.S. for August 1993 to November 1997. Graphs of the average basis for the four...

The cotton basis is examined graphically and statistically to determine if the basis differs across U.S. production regions and within the crop year as economic theory predicts. The analysis indicates the basis differs for some, but not all, regions consistent with the theory. Results also show...