Price information in Producer markets: An evaluation of futures and spot cotton price relationships in the southwest region using cointegration
✍ Scribed by Darren Hudson; Emmett Elam; Don Ethridge; Jeff Brown
- Publisher
- John Wiley and Sons
- Year
- 1996
- Tongue
- English
- Weight
- 519 KB
- Volume
- 12
- Category
- Article
- ISSN
- 0742-4477
No coin nor oath required. For personal study only.
✦ Synopsis
Producer spot (cash) prices of cotton from the Southwest region were compared to futures prices for cotton to examine the cashJutures price relationship using the cointegration technique. The results showed that the cash producer price and the futures price were not consistently related. The futures and cash prices were cointegrated in 2 of 4 years, while not cointegrated in the other 2 years. The inconsistency indicates that the reliability of the futures price as a source of price information to producers of cotton in the Southwest is questionable. This relationship may be arising from quality uncertainty in the producer market. 01996