Revolutionizing Agricultural Markets: Long-Term Futures for Price Forecasts and Insurance
Futures markets for agricultural products usually have short-term maturity dates. If these markets had longer maturities, futures prices could be used for long-term price predictions and contracts. This study created a method to make long-term futures curves from current futures prices. By analyzing lean hogs and soybeans data, the method produced realistic results, showing that agricultural commodity markets have predictable patterns in prices and yields over time.