Hostname: page-component-8448b6f56d-mp689 Total loading time: 0 Render date: 2024-04-19T19:31:25.867Z Has data issue: false hasContentIssue false
  • English
  • Français

Discussion: Commodity Price Discovery: Problems That Have Solutions or Solutions That Are Problems

Published online by Cambridge University Press:  26 January 2015

T. Randall Fortenbery
T. Randall Fortenbery*
Affiliation:
Department of Agricultural and Applied Economics, University of Wisconsin Madison
Get access

Abstract

This paper examines three invited papers focused on commodity prices. Public responses to high nominal commodity prices and perceived increases in price risk have ranged from attempts to assign blame, attempts to change contracting arrangements, and development of public policy that “protects“ the market from future occurrences of unacceptable behavior. Interestingly, a result of increased commodity price volatility has suggested that futures markets no longer “work.“ This is ironic given that futures markets initially came into existence as tools for managing the negative impacts of commodity price risk. In response to perceptions of market failure some are looking for strategies to regulate the who and how of futures trading.

Keywords

futures marketshedgingprice riskrisk managementspeculationG13Q11Q13Q14
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 41 , Issue 2 , August 2009 , pp. 393 - 402
Copyright
Copyright © Southern Agricultural Economics Association 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Cattlenetwork. R-CALF: Group Joins Coalition To Reform Broken Futures Markets. Internet site: www.cattlenetwork.com/content.asp?contentid301610 (Accessed May 2009).Google Scholar
Commodity Futures Trading Commission (CFTC). Staff Report on Commodity Swap Dealers & Index Traders with Commission Recommendations. Internet site: www.cftc.gov/stellent/groups/public/@newsroom/documents/file/cftcstaffreportonswapdealers09.pdf (Accessed May 2009).Google Scholar
Futures Magazine. Regulator Gets an Earful. Internet site: http://petrodex.com/news.cfm?content=08_tr_news/0508_42&sidenav = sn_innews&pageno=42 (Accessed May 2009).Google Scholar
Garbade, K.D., and Silber, W.L. “Price Movements and Price Discovery in Futures and Cash Markets.” The Review of Economics and Statistics 65(1983:289–97.CrossRefGoogle Scholar
Hatchett, R., Brorsen, W., and Anderson, K. “Basis Forecasts and the Law of One Price.” Paper presented at the 2009 NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Risk, St. Louis, MO, 2009.Google Scholar
Irwin, S.H., Sanders, D.R., and Merrin, R.P. “Devil or Angel: The Role of Speculation in the Recent Commodity Price Boom (and Bust).” Invited Paper, Southern Agricultural Economics Association Annual Meetings, Atlanta, GA, 2009.Google Scholar
Luken, W. Quoted in “Commodities Markets “Ripe” for Manipulation, Says US CFTC Chief,” 2008. Internet site: www.dornain-b.corn/investments/OTmmodities/0080624_œnmiodities_markets.htrri (Accessed May 2009).Google Scholar
McKenzie, A.M., and Kunda, E.L. “Managing Price Risk in Volatile Markets, Issues and Potential Solutions.” Invited Paper, Southern Agricultural Economics Association Annual Meetings, Atlanta, GA, 2009.Google Scholar
National Cattleman's Beef Association. Testimony by Ernie Moralesto the United States House of Representatives — Committee on Agriculture — Subcommittee on Livestock, Dairy and Poultry, 2007. Internet site: http://agriculture.house.gov/testimony/110/h70308/Morales.pdf (Accessed May 2009).Google Scholar
Southeast Farm Press. 2008. Internet site: http://soumeastfarmpress.com/cotton/conmiodity-trading-0408/ (Accessed May 2009).Google Scholar
Wilson, W.W. “Grain Contracting Strategies to Induce Delivery and Performance in Volatile Markets.” Invited Paper, Southern Agricultural Fxonomics Association Annual Meetings, Atlanta, GA, 2009.Google Scholar
Witherspoon, J.T “How Price Discovery by Futures Impacts the Cash Markets.” Journal of Futures Markets 11(1993:685–96.Google Scholar
Zulauf, C.R, and Irwin, S.H. “Market Efficiency and Marketing to Enhance Income of Crop Producers.” Review of Agricultural Economics 20(1998:308–31.Google Scholar