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The Basis Effects of Failures to Converge

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  • Karali, Berna
  • McNew, Kevin

Abstract

We study the spatial patterns to wheat basis (spot price minus futures price) for wheat contracts between 2005 and 2009. Restricting our attention to a single delivery market—Toledo, Ohio— and to cash markets within 100 miles of Toledo, we measure the co-movement of basis at inland markets with basis at Toledo. We examine the degree to which that co-movement is disrupted for contracts that failed to converge at delivery time.

Suggested Citation

  • Karali, Berna & McNew, Kevin, 2010. "The Basis Effects of Failures to Converge," 2010 Conference, April 19-20, 2010, St. Louis, Missouri 285332, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:nccc10:285332
    DOI: 10.22004/ag.econ.285332
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    1. Irwin, Scott H. & Garcia, Philip & Good, Darrel L. & Kunda, Eugene L., 2008. "Recent Convergence Performance of CBOT Corn, Soybean, and Wheat Futures Contracts," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(2), pages 1-6.
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