(Podcast) Episode 008: Futures Market Efficiency and the Influence of Speculators

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The AgEconMT crew is joined by Dr. Mindy Mallory, an Associated Professor of Economics in the Department of Agricultural and Consumer Economics at the University of Illinois, Urbana-Champaign. Mindy talks in depth about her current research with Quanbiao Shang and Dr. Philip Garcia. The study examines the bid-ask spread in corn markets and empirically identifies three components that make up the bid-ask spread: asymmetric information (adverse selection), inventory costs, and order processing. Her findings provide important insights about the efficiency of futures markets and the impacts of speculators.

Do you use futures markets to hedge price risk or better understand agricultural commodity markets? Do you have experiences that make you wonder whether futures markets are efficient?

(Intro and outro music by Trevor Sensor)

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About Author

Dr. Anton Bekkerman is a former associate professor in the Department of Agricultural Economics and Economics at Montana State University. He currently serves as the director of the New Hampshire Agricultural Experiment Station. Bekkerman's primary areas of research are grain marketing, basis and price forecast modeling, understanding how grain prices are affected by changes in supply chain infrastructures and quality demands, and analyzing the economic trade-offs of adopting alternative dryland cropping systems in Montana. Although Bekkerman grew up on the east coast, he had made a small step toward production agricultural after ranching a flock of six backyard chickens.

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