Do Interest Rates Explain Disaggregate Commodity Price Growth?

The storage at a loss paradox - inventories despite an inadequate spot-futures price spread to cover storage costs— - is an unresolved issue of long-standing interest to economists. Alternative explanations include risk premiums for futures market speculators, convenience yields from holding inventories, and mismeasurement/aggregation of data. Statistical analyses of regional- and elevator-level data suggest that aggregation can impact results, and that soybean price behavior is generally consistent with inter-temporal arbitrage conditions, while corn price behavior points to convenience yields at longer horizons.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/21319
Total Pages:
29
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-24

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