The cost of carry model can be applied to corn (as a commodity). However, a significant feature of corn (aside from material storage cost, reflect in a near term contango) is seasonality: during harvest months (Fall in the U.S.) we expect an abrupt drop in the forward to reflect the lack of storage needed during harvest
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bezzer1185 2 months ago in playlist finance
Great clip. Thank you very much. I have a question..
Why doesn't after the fwd curve drops due to harvest season, why doesn't it resume on it's upward slope? It seem to move sidways through the winter months on the back end.
Thanks again
GREENHOMME 3 years ago