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Title:Hedging Short-term Corn Price Risks in Tokyo versus Chicago's Project A
Author(s):Leuthold, Raymond M.; Kim, Min-Kyoung
Subject(s):Project A
Tokyo Grain Exchange
Chicago Board of Trade
hedging
Abstract:This study investigates whether U.S. corn merchants can effectively manage the overnight price risk of cash corn purchased after the Chicago Board of Trade closes at 1:15 p.m. on either the electronic Project A market or in the corn contract traded on the Tokyo Grain Exchange. Three scenarios are examined: 1) overnight hedges; 2) day-to-day hedges; and 3) two-day hedges. Overnight hedges are the least effective of the three scenarios on both markets. E*hedging on Project A is more effective than hedging in Tokyo, yet trading of corn futures contracts on Project A remains relatively thin and illiquid. Steps need to be taken to encourage more trading of this contract.
Issue Date:2000-01
Publisher:Office for Futures and Options Research, Department of Agricultural Economics, College of Agricultural, Consumer, and Environmental Sciences at the University of Illinois at Urbana-Champaign
Series/Report:OFOR Working Paper Series, no. 00-02
Genre:Working / Discussion Paper
Type:Text
Language:English
URI:http://hdl.handle.net/2142/4019
Publication Status:published or submitted for publication
Peer Reviewed:not peer reviewed
Date Available in IDEALS:2008-03-17


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