Commodities III: Speculation on (Agricultural) Commodity Derivatives and Financialization of Commodity-Price Formation

2014 ◽  
pp. 401-442
Author(s):  
Luc Nijs
Keyword(s):  
Commodity Price ◽  
Price Formation ◽  
Agricultural Commodity ◽  
Commodity Derivatives

The Financialization Thesis Revisited: Commodities as an Asset Class

2018 ◽  
Author(s):  
Sarah McGill
Keyword(s):  
Commodity Prices ◽  
Commodity Price ◽  
Commodity Markets ◽  
Price Formation ◽  
Short Term ◽  
Financial Investment ◽  
Price Boom ◽  
Asset Class ◽  
Commodity Derivatives

Roughly coinciding with the onset of the commodity price boom of the 2000s was an influx of financial investment in commodity derivatives. This ‘financialization’ has given rise to debates regarding the potential influence of investors on commodity prices. This chapter examines these debates and places them within the context of the wider scholarship on financialization. It argues that critiques of financialization are problematic in several important respects. They are underpinned by long-standing suspicions and misconceptions of derivatives trading as a socially unproductive or harmful activity; they tend to conflate the participation of financial investors with ‘speculation’. The chapter finds that the term ‘financialization’ is ultimately misleading for in its characterization of the new institutional realities of the commodity price formation process. Rather than attempting to demarcate ‘purely’ financial investment in commodities from commercial trading, ‘financialization’ should refer to the growth of ‘hyper’ or short-term trading that occurs in commodity markets.

scholarly journals Bubbles in Agricultural Commodity Markets of China

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-7 ◽  
Author(s):  
Xi-Xi Zhang ◽  
Lu Liu ◽  
Chi-Wei Su ◽  
Ran Tao ◽  
Oana-Ramona Lobonţ ◽  
...  
Keyword(s):  
Time Series Data ◽  
Commodity Prices ◽  
Commodity Price ◽  
International Markets ◽  
Series Data ◽  
Agricultural Commodity ◽  
Augmented Dickey Fuller ◽  
Negative Effect ◽  
Multiple Bubbles ◽  
Market Fundamentals

We employ the generalized supremum augmented Dickey–Fuller test to examine whether there are multiple bubbles in Chinese agricultural commodities. The proposed approach is suitable for time series data and identifies the origination and termination of multiple bubbles. The results indicate the existence of bubbles for some agricultural commodity prices, such as garlic, ginger, corn, and wheat prices, that deviate from their intrinsic values upon market fundamentals. The bubbles in the garlic and ginger market are related to speculative activities. The other bubbles, in the corn and wheat market, are associated with the rising oil price, international market, and the negative effect of stockpiling policy. The authorities should recognize bubbles and observe their evolutions, leading to Chinese agricultural commodity price stabilization. These findings suggest corresponding measures to be implemented. China should establish a unified market information release platform to avoid speculative activities and formulate a market-oriented agricultural policy to enhance competitiveness among the international markets.

scholarly journals On the Dynamic Relationship between U.S. Farm Income and Macroeconomic Variables

2009 ◽  
Vol 41 (2) ◽  
pp. 521-528 ◽  
Author(s):  
Jungho Baek ◽  
Won W. Koo
Keyword(s):  
Interest Rates ◽  
Commodity Prices ◽  
Commodity Price ◽  
Farm Income ◽  
Agricultural Commodity ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Dynamic Relationship ◽  
Long Run ◽  
Short Run

This study examines the short- and long-run effects of changes in macroeconomic variables—agricultural commodity prices, interest rates and exchange rates—on the U.S. farm income. For this purpose, we adopt an autoregressive distributed lag (ARDL) approach to cointegration with quarterly data for 1989–2008. Results show that the exchange rate plays a crucial role in determining the long-ran behavior of U.S. farm income, but has little effect in the short-run. We also find that the commodity price and interest rate have been significant determinants of U.S. farm income in both the short- and long-run over the past two decades.

scholarly journals Macroeconomic Impact of Agricultural Commodity Price Volatility in Nigeria

2019 ◽  
Vol 13 (1) ◽  
pp. 162-174
Author(s):  
Adeyemi A. Ogundipe ◽  
Omobola Adu ◽  
Oluwatomisin M. Ogundipe ◽  
Abiola J. Asaleye
Keyword(s):  
Impulse Response Function ◽  
Price Volatility ◽  
Commodity Price ◽  
Macroeconomic Fluctuations ◽  
Agricultural Commodity ◽  
Agricultural Prices ◽  
Commodity Price Volatility ◽  
Macroeconomic Impact ◽  
Food Imports ◽  
Macroeconomic Aggregates

Introduction: The Nigerian economy has remained consistently heavily dependent on earnings from commodity exports which constitute over 95% external earning and 85% of budgetary and fiscal financing. Agricultural commodity exports have witnessed a significant price swings in the international market in the past few decades resulting in food price hike and macroeconomic distortions in economies heavily dependent on food imports. Methods and Materials: The study assesses the macreoconomic impact of agricultural commodity price volatility in Nigeria from 1970-2017 using Autoregressive Distributive Lag (ARDL) cointegration and Impulse-Response Function (IRF) analysis. The study adopted an atheoretical statistics to ascertain the evidence of swings in macroeconomic aggregates. Results: There was evidence of persistent fluctuations in the macroeconomic variables observed, implying that external price shocks exert a significant impact on the macroeconomic management, since bulk of national budgetary and fiscal financing is from commodity exports. Conclusion: The study found that volatile agricultural prices were responsible for a meager 2% of macroeconomic fluctuations. The empirical evidence corroborates the statistics showing that the share of agriculture in primary commodity exports has consistently remained less than 3% since the advent of crude oil. Furthermore, the study found that the swings in agricultural prices impacts foreign reserves and inflation more significantly and earlier in the time horizons than other macroeconomic aggregates.

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