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Analyzing Changing Price Relationships Between Wheat Futures Markets

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  • Strohmaier, Jay S.
  • Dahl, Reynold P.

Abstract

The purpose of this paper is to determine if hedging effectiveness can be enhanced with an understanding of seasonal and interseasonal changes in relative prices between the three wheat futures markets. The specific objectives of the analysis are to address the following questions : (1) What factors have contributed to increased variability in relative prices? (2)Do seasonal patterns in relative prices exist, and if so, how reliable is such seasonality? (3)How can hard red spring wheat hedgers use changing price spreads to increase the effectiveness of their hedging programs? (4) Can fundamental factors of supply and demand be used to predict forthcoming relative prices, and thus guide hedgers in selection of the most advantageous hedging market?

Suggested Citation

  • Strohmaier, Jay S. & Dahl, Reynold P., 1984. "Analyzing Changing Price Relationships Between Wheat Futures Markets," Staff Papers 14090, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:14090
    DOI: 10.22004/ag.econ.14090
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    File URL: https://ageconsearch.umn.edu/record/14090/files/p84-06.pdf
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    References listed on IDEAS

    as
    1. Gray, Roger W., 1962. "The Seasonal Pattern of Wheat Futures Prices Under the Loan Program," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 3(1), pages 1-12.
    2. Paul, Allen B., 1976. "Treatment of Hedging in Commodity Market Regulation," Technical Bulletins 158109, United States Department of Agriculture, Economic Research Service.
    3. Gray, Roger W. & Peck, Anne E., 1981. "The Chicago Wheat Futures Market: Recent Problems in Historical Perspective," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 18(1), pages 1-28.
    4. Wilson, William W., 1982. "Hedging Effectiveness of U.S. Wheat Futures Markets," Agricultural Economics Reports 23215, North Dakota State University, Department of Agribusiness and Applied Economics.
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