Effect of Institutional Realities on Dynamic Hedging Performance for a Grain Producer: INTRODUCTION

Hedging using the futures market can serve as a way for grain producers to reduce price risk or uncertainty. Confronted with a highly variable yield the question of how much of expected production to hedge becomes especially important for grain producers. A common practice in the optimal hedging lit...

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Bibliographic Details
Published in:The journal of futures markets 1992-04, Vol.43 (1), p.237
Main Authors: Martinez, Steve, Zering, Kelly D
Format: Article
Language:English
Subjects:
Expected utility
Expected values
Futures market
Harvest
Hedging
Interest costs
Margin requirements
Parameter estimation
Price variance
Rain
Online Access:Get full text
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Summary:Hedging using the futures market can serve as a way for grain producers to reduce price risk or uncertainty. Confronted with a highly variable yield the question of how much of expected production to hedge becomes especially important for grain producers. A common practice in the optimal hedging literature is to exclude from the model constraints faced in trading futures. These include contract fixity, commissions, and interest cost.
ISSN:0270-7314
1096-9934