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A Regional Comparison Of U.S. Cotton Basis Patterns

Author

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  • Seamon, V. Frederick
  • Kahl, Kandice H.
  • Curtis, Charles E., Jr.

Abstract

The basis, defined as the cash price minus the futures price, is important when making marketing decisions. The cotton basis is calculated using the July futures price for six major cotton marketing regions in the U.S. for August 1993 to November 1997. Graphs of the average basis for the four complete crop years show that the basis generally followed the expected seasonal pattern. The basis tended to be weakest at harvest and to strengthen later in the crop year. However, a visual inspection showed regional differences in the seasonal pattern. Regional differences in the yearly variability in the basis were also observed. Thus, the usefulness of the average historical basis in predicting the future basis appears to differ depending on the region.

Suggested Citation

  • Seamon, V. Frederick & Kahl, Kandice H. & Curtis, Charles E., Jr., 1997. "A Regional Comparison Of U.S. Cotton Basis Patterns," Working Papers 18806, Clemson University, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:cuaewp:18806
    DOI: 10.22004/ag.econ.18806
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    Cited by:

    1. Welch, J. Mark & Mkrtchyan, Vardan & Power, Gabriel J., 2009. "Predicting the Corn Basis in the Texas Triangle Area," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 27(1-2), pages 1-15.

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    Keywords

    Demand and Price Analysis;

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