Commodity futures markets: are they an effective price risk management tool for the European wheat supply chain?
AbstractThe instability of commodity prices and the hypothesis that speculative behaviour was one of its causes has brought renewed interest in futures markets. The paper analyses the European wheat futures markets (feed and milling) and the Chi- cago Board of Tradeâ€™s wheat contract as a comparison. Although the main purpose of the paper is to analyse whether futures markets are still useful for hedging (con- sidering the demands from different market participants), implicitly this can be seen as testing whether the increasing presence of speculation has made futures markets divorced from physical markets. The results indicate that hedging with futures mar- kets is still a viable alternative for dealing with price risk. This is particularly true in short period hedges (e.g. merchants and processors), where the basis seems to have been affected by the observed price instability.
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Bibliographic InfoArticle provided by Italian Association of Agricultural and Applied Economics (AIEAA) in its journal Bio-based and Applied Economics Journal.
Volume (Year): (Bio-Economy)
Issue (Month): 3 ()
Futures markets; wheat; hedging; commodity prices; price risk; Demand and Price Analysis; G13; Q14; G01;
Other versions of this item:
- Revoredo-Giha, C. & Zuppiroli, M., 2013. "Commodity futures markets: are they an effective price risk management tool for the European wheat supply chain ?," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149773, Italian Association of Agricultural and Applied Economics (AIEAA).
- G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
- Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
- G01 - Financial Economics - - General - - - Financial Crises
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