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Performance of the Weekly Gulf-Kansas City Hard-Red Winter Wheat Basis

Author

Listed:
  • Daniel S. Tilley
  • Steven K. Campbell

Abstract

Weekly Gulf of Mexico cash price minus Kansas City futures price bases for hard-red winter wheat are hypothesized to be related to export commitments and free stocks, grain embargoes, liquidity, and contract month used to calculate the basis. Regression results suggest that increased (decreased) exports or decreased free stocks cause the Gulf cash price to increase (decrease) relative to futures prices. The grain embargo caused Gulf cash prices to decrease relative to futures prices during the period of the embargo. Contract month was found to significantly affect the basis. Market liquidity issues are not resolved.

Suggested Citation

  • Daniel S. Tilley & Steven K. Campbell, 1988. "Performance of the Weekly Gulf-Kansas City Hard-Red Winter Wheat Basis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(4), pages 929-935.
    • Handle: RePEc:oup:ajagec:v:70:y:1988:i:4:p:929-935.
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    File URL: http://hdl.handle.net/10.2307/1241935
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    Cited by:

    1. Bharat Ramaswami & Jatinder Bir Singh, 2006. "Underdeveloped spot markets and futures trading: The Soya Oil exchange in India," Discussion Papers 06-03, Indian Statistical Institute, Delhi.
    2. Kevin McNew & Duane Griffith, 2005. "Measuring the Impact of Ethanol Plants on Local Grain Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 164-180.
    3. Parcell, Joseph L., 2000. "The Impact Of The Ldp On Corn And Soybean Basis In Missouri," 2000 Conference, April 17-18 2000, Chicago, Illinois 18932, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    4. Dummu, Tata Rao, 2009. "Commodity Futures Markets in India: Its Impact on Production and Prices," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 64(3), pages 1-24.
    5. B. Wade Brorsen & John Coombs & Kim Anderson, 1995. "The cost of forward contracting wheat," Agribusiness, John Wiley & Sons, Ltd., vol. 11(4), pages 349-354.
    6. Andrew M. McKenzie, 2005. "The effects of barge shocks on soybean basis levels in Arkansas: A study of market integration," Agribusiness, John Wiley & Sons, Ltd., vol. 21(1), pages 37-52.
    7. Parcell, Joseph L., 2002. "Crop Basis Patterns In The Presence Of Spatial Competition And Government Intervention," Working Papers 26043, University of Missouri Columbia, Department of Agricultural Economics.
    8. Zhang, Rui (Carolyn) & Houston, Jack E., 2005. "Effects of Price Volatility and Surging South American Soybean Production on Short-run Soybean Basis Dynamics," 2005 Conference, April 18-19, 2005, St. Louis, Missouri 19038, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    9. Bradley Isbell & Andrew M. McKenzie & B. Wade Brorsen, 2020. "The cost of forward contracting in the Mississippi barge freight river market," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 226-241, April.
    10. Parcell, Joseph L., 2002. "Emerging Ip Markets: The Tokyo Grain Exchange Non-Gmo Soybean Contract," Working Papers 26038, University of Missouri Columbia, Department of Agricultural Economics.
    11. Shafer, Carl E., 1992. "Hedge Ratios and Basis Behavior: An Intuitive Insight?," Faculty Paper Series 257887, Texas A&M University, Department of Agricultural Economics.
    12. Mohammad Torshizi & Richard Gray, 2018. "An Economic Analysis of Western Canadian Grain Export Capacity," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(2), pages 255-282, June.
    13. 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.

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