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

Gopal Naik and Raymond M. Leuthold

Western Journal of Agricultural Economics, 1988, vol. 13, issue 2, 12

Abstract: 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.

Keywords: Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Date: 1988
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:wjagec:32106

DOI: 10.22004/ag.econ.32106

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