Delivering Cotton on the New York Futures Market

James R. Adams


 
ABSTRACT

Most hedging strategies assume that the basis between the futures market and the local market will remain fairly constant. There are times, however, when the futures market seems to make moves that are not reflected in the local market. Most will agree that the futures market was not designed as a place for producers to sell their crop by delivering cotton against a hedge. In spite of this, there are occasions when a wide basis exists that a producer may want to counter this situation by delivering physical cotton against a futures contract.



Reprinted from 1992 Proceedings Beltwide Cotton Conferences pp. 124 - 125
©National Cotton Council, Memphis TN

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Document last modified Sunday, Dec 6 1998