The Supply of Storage

Michael J. Brennan

Chapter 4 in The Economics of Futures Trading, 1976, pp 100-107 from Palgrave Macmillan

Abstract: Abstract It is a familiar proposition that the amount of a commodity held in storage is determined by the equality of the marginal cost of storage and the temporal price spread. Why then do we observe stocks being carried from one period to the next when the price expected to prevail in the next period — reflected in the futures price quotation for delivery in that period — is below the current price.

Date: 1976
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DOI: 10.1007/978-1-349-02693-7_5

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