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Managing Overnight Corn Price Risks: E*Hedging Versus Tokyo

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  • Leuthold, Raymond M.
  • Kim, MinKyoung

Abstract

This study investigates whether U.S. corn merchants can effectively manage the overnight price risk of cash corn purchased after the Chicago Board of Trade closes at 1:15 p.m. on either the electronic Project A market or in the corn contract traded on the Tokyo Grain Exchange. While neither market provides a very effective alternative using traditional measures of analysis, e*hedging on Project A is more effective than hedging in Tokyo. Both could be very effective for those merchants in the market every day. However, trading of corn futures contracts on Project A remains thin and likely illiquid, limiting its usefulness.

Suggested Citation

  • Leuthold, Raymond M. & Kim, MinKyoung, 2000. "Managing Overnight Corn Price Risks: E*Hedging Versus Tokyo," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 18(3), pages 1-14.
    • Handle: RePEc:ags:jloagb:14718
    DOI: 10.22004/ag.econ.14718
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    References listed on IDEAS

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    1. Ederington, Louis H, 1979. "The Hedging Performance of the New Futures Markets," Journal of Finance, American Finance Association, vol. 34(1), pages 157-170, March.
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    Cited by:

    1. Guillermo Llorente & Jiang Wang, 2020. "Trading and information in futures markets," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 40(8), pages 1231-1263, August.

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