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MARKET INVERSION IN COMMODITY FUTURES PRICES

Byung-Sam Yoon and B Brorsen

Journal of Agricultural and Applied Economics, 2002, vol. 34, issue 3, 18

Abstract: In an inverted market, current prices are higher than future prices and thus the price of storage is negative. Market inversions as measured with futures spreads rarely occur during early months of the crop year. However, market inversions frequently occur across crop years and near the end of the crop year. In the last half of the crop year, market inversions clearly reflect a signal to sell stocks. Too few inversions occur early in the crop year to reach a definitive conclusion for that period. Behavioral finance offers possible explanations of why producers would hold stocks in an inverted market.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2002
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Related works:
Journal Article: Market Inversion in Commodity Futures Prices (2002) Downloads
Working Paper: MARKET INVERSION IN COMMODITY FUTURES PRICES (2001) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:15077

DOI: 10.22004/ag.econ.15077

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