Departmental Fact Sheets

Soybean producers regularly face price and production risk. One means of reducing price risk is through the use of the commodity futures exchange markets. The primary objective of hedging is not to earn a profit, but rather to lock in a specific delivery or purchase price. This factsheet provides an overview to soybean hedging.

Forward cash contract prices reflect a price being offered by a specific buyer for a specific future delivery period, and payment upon delivery, at a specific price. This fact sheet helps explain market signals from forward cash contract prices. Understanding how forward price quotes are derived is important in understanding how to make marketing decisions using forward contract prices.

Spread trading is a risk management strategy used by owners of storable commodities or those planning to own a storable commodity. This fact sheet first explains the futures market spread. Market analysts evaluate the price difference between any two time periods to determine if the market is short-term bullish or short-term bearish. In particular, market analysts evaluate the nearby contract price relative to a deferred contract price.

As the livestock industry changes, producers look to better coordinate the marketing system. This undergraduate research project focused on quantifying the flexibility of the hog industry’s response to a change in price and vice versa. The price-quantity relationship refers to how much the price changes in response to either a change in production (supply) or a change in consumption (demand).

Websites

Agriculture Opportunities in Missouri

The primary purpose of this website is to provide comprehensive decision-making tools for small and medium-sized farmers that help analyze how alternative crops can be integrated into their existing farms and rotations. Educational modules have also been developed that address agronomy, equipment, financial considerations and marketing of a variety of crops that are suitable for Missouri producers.

This project is supported by Agriculture and Food Research Initiative Competitive Grant no. 2012-68006-30180
from the USDA National Institute of Food and Agriculture.

Extension Publications

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