Journal Article

ANALYSIS OF SOYBEAN TRADE STRATEGIES WITH FORWARD CONTRACTS ON THE CHICAGO STOCK EXCHANGE AND ON THE SPOT MARKET IN CASCAVEL, BRAZIL

Ferreira, Jonathan Dias, Aguiar, Odilon Felipe Tavares

2019

Overview

In the wake of frequent variables that interfere with the agricultural market, rural agents (producers) suffer liabilities due to their decisions, especially at the moment of commercialization. The forward market is precisely a strategy that may reduce the risks in oscillating prices of commodities and makes way towards the future formation of prices. Current paper compares the commercialization of soybeans in the forward and spot markets in terms of prices practiced between the harvest years 2011/2012 and 2016/2017. Data provided by the Chicago Board of Trade (CBOT) were used as reference for forward contracts traded in September with maturation in January and spot prices practiced in January retrieved from data from Coopavel in Cascavel PR Brazil. Forward contracts traded in September with maturity in January had a better performance when compared to January spot prices for harvests 2011/2012, 2012/2013, 2013/2014. Due to fluctuations in weather and market trends, they were the factors that weighed most on harvests 2014/2015, 2015/2016 and 2016/2017 for better prices on most of the maturities for January on the spot market. Results show that, although spot price was better in certain periods, the marketing strategy on forward markets is highly interesting since the producer can employ profits and have guarantees against market risks