Actual Farmer Market Timing
AbstractOne maxim that has been circulating among farmers is that most farmers sell in the lower third of the market. This maxim is soundly rejected using data from Oklahoma elevators. In fact, roughly half of producers sell in the upper third of the market. Thus, there does not seem to be a great need for producers to hire a market advisor to do their marketing for them. But, some farmers do store longer than is optimal and they could be encouraged to sell sooner after harvest. In the short run, farmers sold after price increases and held after price decreases. Price movements in the days after a large number of sales were no different than price movements after few sales. While farmers are noise traders in the short run, it does appear that they are responding to long-run market signals. Even though there may be room for improvement, it appears that farmers are doing a good job of deciding when to sell their wheat.
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Bibliographic InfoPaper provided by NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management in its series 2002 Conference, April 22-23, 2002, St. Louis, Missouri with number 19065.
Date of creation: 2002
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Web page: http://www.agebb.missouri.edu/ncrext/ncr134/
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"Noise Trade Demand In Futures Markets,"
ACE OFOR Reports
14765, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
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