Ebook: Grain Futures Contracts: An Economic Appraisal

This study is an independent scholarly analysis of the economics of the grain futures contracts of the Chicago Board of Trade. The study was made possible by a research grant to the MidAmerica Institute from the Chicago Board of Trade, and we gratefully acknowledge this financial support, as well as the information and vast body of experience made available to us by the Division of Economic Analysis and members of the Exchange. Several other organizations also provided invaluable help from the inception of this study through the full process, either in the form of information, or through discussion: the Commodity Futures Trading Commission, the U.S. Department of Agriculture, the National Grain and Feed Association, the American Soybean Association, the Senate Committee on Agriculture, Nutrition and Forestry, the House Committee on Agriculture, the General Accounting Office, and the Center for the Study of Futures and Options Markets at Virginia Polytechnic and State University. We express our thanks. The primary authors wish to extend a special word of apprecia­ tion to Michael Brennan, Merton Miller, Richard Roll, Hans Stoll and Lester Telser, who served as members of the Resource Panel for the study. While key strengths of the study reflect their input, ultimate responsibility for the analysis rests with the primary authors.

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This book is an independent scholarly analysis of the economics of the grain futures contracts of the Chicago Board of Trade (CBT), special attention being paid to the recent performance and future prospects of a crucial aspect of grain futures contracts - the delivery process. Delivery links futures and spots markets, and is essential to the efficient performance of a grain futures contract. Both hedging effectiveness and the `informativeness' of futures prices depend upon this linkage.

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This book is an independent scholarly analysis of the economics of the grain futures contracts of the Chicago Board of Trade (CBT), special attention being paid to the recent performance and future prospects of a crucial aspect of grain futures contracts - the delivery process. Delivery links futures and spots markets, and is essential to the efficient performance of a grain futures contract. Both hedging effectiveness and the `informativeness' of futures prices depend upon this linkage.
Content:
Front Matter....Pages i-xv
The Economic Function of Futures Trading....Pages 1-7
The Role of the Futures Delivery Process....Pages 9-50
Futures Contracts as a Merchandising Tool: The Role of Delivery as a Means of Ownership Transfer....Pages 51-62
Maintaining the Integrity of Grain Futures Contracts: The Economics of Manipulation and Its Prevention....Pages 63-106
The Economic Effect of Potential Grain Futures Contract Redesign....Pages 107-138
Summary and Conclusions....Pages 139-145
Back Matter....Pages 147-184

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This book is an independent scholarly analysis of the economics of the grain futures contracts of the Chicago Board of Trade (CBT), special attention being paid to the recent performance and future prospects of a crucial aspect of grain futures contracts - the delivery process. Delivery links futures and spots markets, and is essential to the efficient performance of a grain futures contract. Both hedging effectiveness and the `informativeness' of futures prices depend upon this linkage.
Content:
Front Matter....Pages i-xv
The Economic Function of Futures Trading....Pages 1-7
The Role of the Futures Delivery Process....Pages 9-50
Futures Contracts as a Merchandising Tool: The Role of Delivery as a Means of Ownership Transfer....Pages 51-62
Maintaining the Integrity of Grain Futures Contracts: The Economics of Manipulation and Its Prevention....Pages 63-106
The Economic Effect of Potential Grain Futures Contract Redesign....Pages 107-138
Summary and Conclusions....Pages 139-145
Back Matter....Pages 147-184
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