| Abstract: | ABSTRACT This paper provides an economic interpretation of the prices for the recently introduced potato futures contract trading on the New York Cotton Exchange, based on a review of economic literature. Potatoes differ from other commodities traded on futures markets, because they are stored from one crop year to the next. Harvest contract prices are expected to be similiar each year when first introduced for trading, but become more variable as specific supply and demand information for that year becomes available. Spreads across crop years will be much less correlated than spreads within a crop year. Inverse carrying charges are not expected within the crop year. |
