Pre-harvest Hedging Behavior and Market Timing Performance of Private Market Advisory Services

Market advisory services are one the major providers of marketing information to agricultural producers. However, limited objective evidence exists regarding the hedging behavior and value of marketing information provided by these firms. .In this study, the pre-harvest hedging behavior and market timing ability of six market advisory services are examined. Daily data on recommended corn and soybean futures and options bedging positions are available for the 1991-1994 pre-harvest seasons. The analysis of hedging behavior resulted in a number of interesting findings. For example, the services use a wide array of bedging positions, mostly short, sometimes long, and both futures and options are employed. Also, there is substantial time series variation in the hedge recommendations.