This study investigates the effects of South American production (SAP) and futures volatility on the soybean price dynamics in terms of their effects on the basis. The results of the econometric model showed that both South American production and futures volatility of the nearby contract have...

Agribusinesses make long-term plant-investment decisions based on discounted cash flow. It is therefore incongruous for an agribusiness firm to use cash flow as a plant-investment criterion and then to completely discard cash flow in favor of batch profits as an operating objective. This paper...

Weather conditions pose unique risks to dairy producers. Weather derivatives represent a potentially promising approach to augment dairy producers' risk management against adverse weather events. This study examines the effect of basis risk in weather derivatives, and whether the existence of...

Academia and the finance industry generate many proposals for new contract markets. Unfortunately, many proposed markets lack the critical attributes that promote success. We examine these attributes, and evaluate the potential of several announced proposals. We find that proposals emanating...

Myers and Thompson (1989) pioneered the concept of a generalized approach to estimating hedge ratios, pointing out that the model specification could have a large impact on the hedge ratio estimated. While a huge empirical literature exists on estimating hedge ratios, the literature is lacking a...

A growing body of recent evidence suggests that premiums for financial options might be too high. For agricultural options, market participants often make similar claims, however there is very limited scientific literature to prove or disprove such claims. This research investigates the...

This study contributes to understanding price risk management through hedging strategies in a forecasting context. A relatively new forecasting method, nonparametric local polynomial kernel (LPK), is used and applied to the hog sector. The selective multiproduct hedge based on the LPK price and...

Mandatory price reporting legislation will make available to the public on a weekly basis information on terms of trade for forward contracts. The new information will provide marketing intentions details that were previously unavailable to agents in the fed cattle market. An experiment was...

This organization (NCR-134) began 20 years ago to serve as a meeting ground for applied commodity price analysts in academic, business and government positions. The primary objective was to foster interaction, and discuss recent applied research and extension applications, and emerging related...

Previous research found that country elevators that are the first in their area to grade wheat and pay quality-adjusted prices would receive above-normal profits at the expense of their competitors. Because of spatial monopsony, these early-adopting elevators would pass on to producers only 70%...