IDEAS home Printed from https://ideas.repec.org/a/ags/wjagec/32366.html
   My bibliography  Save this article

Cross Hedging Hay Using Corn Futures: An Empirical Test

Author

Listed:
  • Blake, Martin L.
  • Catlett, Lowell B.

Abstract

This study examines the use of corn futures contracts to cross hedge both U.S. hay and New Mexico alfalfa hay. Correlations between monthly spot U.S. hay prices and corn futures prices ranged from .828 to .970 and were all significant at the alpha= .001 level. Multiple regression was used to determine the optimal corn futures contract month to cross hedge each spot monthly hay price. Regressions were used to determine the coverage ratio of tons of hay per corn futures contracts. A routine cross hedge was simulated and showed that cross hedging hay using corn futures increases gross returns per ton of hay.

Suggested Citation

  • Blake, Martin L. & Catlett, Lowell B., 1984. "Cross Hedging Hay Using Corn Futures: An Empirical Test," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(1), pages 1-8, July.
    • Handle: RePEc:ags:wjagec:32366
    DOI: 10.22004/ag.econ.32366
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/32366/files/09010127.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.32366?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hayenga, Marvin L. & DiPietre, Dennis D., 1981. "Hedging Pork Products Using Live Hog Futures: A Feasibility Analysis," 1981 Annual Meeting, July 26-29, Clemson, South Carolina 279413, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brake, William & Anderson, John D. & Coffey, Brian K., 2006. "Geographic and Seasonal Differences in the Feeder Cattle Hedging Risk," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35325, Southern Agricultural Economics Association.
    2. Coffey, Brian K. & Anderson, John D. & Parcell, Joseph L., 2002. "Spatial Analysis Of Feeder Cattle Hedging Risk," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California 36586, Western Agricultural Economics Association.
    3. Zhao, Jieyuan & Goodwin, Barry K., 2012. "Dynamic Cross-Hedge Ratios: An Application of Copula Models," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124610, Agricultural and Applied Economics Association.
    4. Zacharias, Thomas P. & Lange, Mark D. & Gleason, William J. & Traylor, Harlon D., 1987. "A Producer-Level Cross-Hedge For Rough Rice Using Wheat Futures," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(2), pages 1-8, December.
    5. Zura Kakushadze & Juan Andrés Serur, 2018. "151 Trading Strategies," Springer Books, Springer, number 978-3-030-02792-6, February.
    6. Regmund, Wes & Robinson, John & Anderson, David, "undated". "Higher and More Stable Returns From Cottonseed," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252813, Southern Agricultural Economics Association.
    7. Coffey, Brian K. & Anderson, John D. & Parcell, Joseph L., 2000. "Optimal Hedging Ratios And Hedging Risk For Grain By-Products," 2000 Annual meeting, July 30-August 2, Tampa, FL 21804, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Diersen, Matthew A., 2008. "Hay Price Forecasts at the State Level," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37600, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miler, Stephen E., 1982. "Forward Pricing Feeder Pigs," 1982 Annual Meeting, August 1-4, Logan, Utah 279207, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    Keywords

    Marketing;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:wjagec:32366. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/waeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.