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Anticipatory Signals of Changes in Corn Demand

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  • Verteramo, Leslie J.
  • Tomek, William G.

Abstract

This paper analyzes changes in the expected demand for corn in the U.S., and it explores whether anticipatory signals of price jumps can be obtained from simple models. Two main objectives are considered. One is to estimate the relationship between the expected supply of corn and corresponding prices of futures contracts. We argue that such results can provide estimates of demand relationships and their shifts with the passage of time. Moreover, such analysis should allow us to test for possible changes in the structure of demand. A second, related objective is to demonstrate how such historical estimates can allow an analyst to appraise the futures markets’ quotes relative to forecasts from the historical model. We argue that the difference in the two prices may contain useful information.

Suggested Citation

  • Verteramo, Leslie J. & Tomek, William G., 2015. "Anticipatory Signals of Changes in Corn Demand," 2015 Conference, April 20-21, 2015, St. Louis, Missouri 285843, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:n13415:285843
    DOI: 10.22004/ag.econ.285843
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    References listed on IDEAS

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    1. Mark, Darrell R. & Brorsen, B. Wade & Anderson, Kim B. & Small, Rebecca M., 2008. "Price Risk Management Alternatives for Farmers in the Absence of Forward Contracts with Grain Merchants," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(2), pages 1-4.
    2. Tomek, William G., 1979. "Estimating Demand Relations Using Futures Prices," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 31(4), pages 1-10, October.
    3. E. J. Working, 1927. "What Do Statistical "Demand Curves" Show?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 41(2), pages 212-235.
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    Cited by:

    1. Zhu, Jiafeng & Isengildina-Massa, Olga Isengildina-, 2017. "Futures-Based Forecasts of U.S. Crop Prices," 2017 Conference, April 24-25, 2017, St. Louis, Missouri 285881, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.

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