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Predicting the Corn Basis in the Texas Triangle Area

Author

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  • Mkrtchyan, Vardan
  • Welch, J. Mark
  • Power, Gabriel J.

Abstract

This study develops a new and straightforward economic model of basis forecasting that outperforms the simple three-year average method suggested in much of the literature. We use monthly data of the corn basis in the Texas Triangle Area from February 1997 to July 2008. The results and the graphs indicate that the new model based on economic fundamentals performs better than basis estimates using a three-year moving average.

Suggested Citation

  • Mkrtchyan, Vardan & Welch, J. Mark & Power, Gabriel J., "undated". "Predicting the Corn Basis in the Texas Triangle Area," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46759, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saeana:46759
    DOI: 10.22004/ag.econ.46759
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    1. Seamon, V. Frederick & Kahl, Kandice H. & Curtis, Charles E., Jr., 1997. "A Regional Comparison Of U.S. Cotton Basis Patterns," Working Papers 18806, Clemson University, Department of Agricultural and Applied Economics.
    2. Parcell, Joe L. & Schroeder, Ted C. & Dhuyvetter, Kevin C., 2000. "Factors Affecting Live Cattle Basis," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(3), pages 531-541, December.
    3. Taylor, Mykel R. & Dhuyvetter, Kevin C. & Kastens, Terry L., 2006. "Forecasting Crop Basis Using Historical Averages Supplemented with Current Market Information," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(3), pages 1-19, December.
    4. Jiang, Bingrong, 1997. "Corn and soybean basis behavior and forecasting: fundamental and alternative approaches," ISU General Staff Papers 1997010108000013213, Iowa State University, Department of Economics.
    5. Tomek, William G. & Peterson, Hikaru Hanawa, 2000. "Risk Management in Agricultural Markets: A Survey," Staff Papers 121140, Cornell University, Department of Applied Economics and Management.
    6. Outlaw, Joe L. & Anderson, David P. & Klose, Steven L. & Richardson, James W. & Herbst, Brian K. & Waller, Mark L. & Raulston, J. Marc & Sneary, Shannon L. & Gill, Robert Chope, II, 2003. "An Economic Examination of Potential Ethanol Production in Texas," Working Papers 42707, Texas A&M University, Agricultural and Food Policy Center.
    7. Sanders, Dwight R. & Manfredo, Mark R., 2006. "Forecasting Basis Levels in the Soybean Complex: A Comparison of Time Series Methods," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 38(3), pages 513-523, December.
    8. Hayenga, Marvin L. & Jiang, Bingrong, 1997. "Corn and Soybean Basis Behavior and Forecasting: Fundamental and Alternative Approaches," Staff General Research Papers Archive 10400, Iowa State University, Department of Economics.
    9. William G. Tomek, 1997. "Commodity Futures Prices as Forecasts," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(1), pages 23-44.
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    Cited by:

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    2. Javier Ho & Paul Bernal, 2021. "Estimating a global demand model for soybean traffic through the Panama Canal," Journal of Shipping and Trade, Springer, vol. 6(1), pages 1-23, December.
    3. Bullock, David W. & Wilson, William W., "undated". "Factors Influencing the Gulf and Pacific Northwest (PNW) Soybean Export Basis: An Exploratory Statistical Analysis," Agribusiness & Applied Economics Report 288512, North Dakota State University, Department of Agribusiness and Applied Economics.
    4. Mohammad Hasan Mobarok & Wyatt Thompson & Theodoros Skevas, 2024. "Sensitivity of the United States crop basis and distribution network to precipitation," Agribusiness, John Wiley & Sons, Ltd., vol. 40(4), pages 908-925, October.
    5. William Wilson & Prithviraj Lakkakula, 2021. "Secondary rail car markets for grain transportation and basis values," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 472-488, July.
    6. Bullock, Shaina S. & Bullock, David W. & Wilson, William W., 2023. "Short-Term Factors Influencing Corn Export Basis Values in the Pre- and Post-COVID Periods: A Comparison of Econometric and Machine Learning Approaches," 2023 Conference, April 24-25, 2023, St. Louis, Missouri 379019, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    7. Adjemian, Michael K. & Marshall, Kandice K. & Hubbs, Todd & Penn, Jerrod, 2016. "Decomposing Local Prices into Hedgeable and Unhedgeable Shocks," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235874, Agricultural and Applied Economics Association.

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