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An analysis of preharvest soybean marketing strategies in louisiana using forward and futures contracts

Author

Listed:
  • T. P. Zacharias

    (Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge)

  • D. A. Zaunbrecher

    (Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge)

  • H. D. Traylor

    (Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge)

  • B. E. McManus

    (Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge)

Abstract

The purpose of this article is to analyze forward and futures contracts as preharvest soybean marketing alternatives. The effects of location, fraction of the crop contracted, and date of contract are examined. Results indicate that both forward and futures prices perform better than cash sales at harvest. In general, forward and futures price distributions had higher means, lower variances, and higher minimum values relative to cash sale at harvest. Only minor differences were observed across locations.

Suggested Citation

  • T. P. Zacharias & D. A. Zaunbrecher & H. D. Traylor & B. E. McManus, 1987. "An analysis of preharvest soybean marketing strategies in louisiana using forward and futures contracts," Agribusiness, John Wiley & Sons, Ltd., vol. 3(4), pages 413-426.
    • Handle: RePEc:wly:agribz:v:3:y:1987:i:4:p:413-426
    DOI: 10.1002/1520-6297(198724)3:4<413::AID-AGR2720030407>3.0.CO;2-U
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    References listed on IDEAS

    as
    1. Ray D. Nelson, 1985. "Forward and Futures Contracts as Preharvest Commodity Marketing Instruments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(1), pages 15-23.
    2. Miller, Stephen E., 1986. "Forward Contracting Versus Hedging Under Price and Yield Uncertainty," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 18(2), pages 139-146, December.
    3. Anaman, Kwabena A. & Boggess, William G., 1986. "A Stochastic Dominance Analysis Of Alternative Marketing Strategies For Mixed Crop Farms In North Florida," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(2), pages 1-9, December.
    4. Alexander, Vickie J. & Musser, Wesley N. & Mason, George, 1986. "Futures Markets and Firm Decisions Under Price, Production, and Financial Uncertainty," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 18(2), pages 39-50, December.
    5. Miller, Stephen E., 1986. "Forward Contracting Versus Hedging Under Price And Yield Uncertainty," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(2), pages 1-8, December.
    6. Anaman, Kwabena A. & Boggess, William G., 1986. "A Stochastic Dominance Analysis of Alternative Marketing Strategies for Mixed Crop Farms in North Florida," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 18(2), pages 257-266, December.
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    Cited by:

    1. Asplund, Nathan M. & Forster, D. Lynn & Stout, Thomas T., 1989. "Participation By Farmers In Forward Contracting And Hedging," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270516, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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