Do Farmers Exhibit Disposition Effect?: Evidence from Grain Marketing

disposition effect, grain marketing, Agribusiness, Institutional and Behavioral Economics, Marketing,

Evolving Market Performance in Brazilian Futures Contracts Using Relative Efficiency

Marketing,

Probability Distortion and Loss Aversion in Futures Hedging

We analyze how the introduction of probability distortion and loss aversion in the standard hedging problem changes the optimal hedge ratio. Based on simulated cash and futures prices for soybeans, our results indicate that the optimal hedge changes considerably when probability distortion is considered. However, the impact of loss aversion on hedging decisions appears to be small, and it diminishes as loss aversion increases. Our findings suggest that probability distortion is a major driving force in hedging decisions, while loss aversion plays just a marginal role.Marketing,

Dynamic Decision Making in Agricultural Futures and Options Markets

This paper investigates the dynamics of sequential decision-making in agricultural futures and options markets. Analysis of trading records of 12 traders identified considerable heterogeneity in individual dynamic trading behavior. Using risk measures derived from the deltas and vegas of trader’s portfolios, we find nearly half the traders behavior is consistent with a house-money effect and the other half with loss aversion. These findings correspond closely to expected behavior inferred from elicited utility and probability weighting functions. The results call into question more aggregate findings that discount probability weighting to develop risk measures which support the notion of more uniform, less heterogeneous, behavior. Understanding behavior in a prospect theory context appears to call for investigation of both the probability weighting and utility functions. Our findings also suggest that strategies for loss-averse traders who consolidate gains and avoid using gains in risk-seeking market activities are effective.loss aversion, house-money effect, futures, options, Agricultural Finance,

Are Canadian Farmers Overconfident?

wheat, marketing, overconfidence, Agribusiness, Institutional and Behavioral Economics, Marketing,

THE FEASIBILITY OF A BOXED BEEF FUTURES CONTRACT: HEDGING WHOLESALE BEEF CUTS

The purpose of this paper is to investigate the feasibility of a new futures contract for hedging wholesale transactions in the beef industry based on the USDA boxed beef cutout index (BBCO). The results suggest the live cattle futures contract is not an adequate tool to manage the price risk of wholesale meat transactions in the beef industry. However, a futures contract based on the BBCO index might provide considerably more opportunities for the hedging of wholesale meat cut prices. A pattern of improved hedging effectiveness at more distant horizons also appears to emerge for the individual cuts of meat using the conditional hedge procedures. These results may be of particular interest to members of the meat industry with longer planning horizons, and more diversified transactions.hedge ratio, hedging effectiveness, boxed-beef cutout, wholesale beef prices, Marketing,

Activity schedule and foraging in Protopolybia sedula (Hymenoptera, Vespidae)

Protopolybia sedula is a social swarming wasp, widely spread throughout many countries in the Americas, including most of Brazil. Despite its distribution, studies of its behavioral ecology are scarce. This study aimed to describe its foraging activity and relation to climatic variables in the city of Juiz de Fora in southeastern Brazil. Three colonies were under observation between 07:00 and 18:00 during April 2012, January 2013, and March 2013. Every 30 minutes, the number of foragers leaving and returning to the colony was registered along with air temperature and relative humidity. Activity began around 07:30¸ increased between 10:30 and 14:30, and ended around 18:30. A mean of 52.7 exits and 54 returns were measured every 30 minutes. The daily mean values were 1,107 ± 510.6 exits and 1,135 ± 854.8 returns. Only one colony showed a significant correlation between forager exits and temperature (rs = 0.8055; P \u3c 0.0001) and between exits and relative humidity (rs = -0.7441; P = 0.0001). This paper shows that climatic variables are likely to have little control on the foraging rhythm of P. sedula when compared to other species, suggesting the interaction of other external and internal factors as stimuli of species foraging behavio

Uptake of macromolecules by cercariae during skin penetration and transformation to schistosomula (Schistosoma mansoni)

Here, we observed the uptake of membrane-impermeant molecules by cercariae as they penetrate the skin and are transformed into schistosomula. We propose that membrane-impermeant molecules, Lucifer Yellow, Propidium iodide and Hoechst 33258 enter the parasite through both thenephridiopore and the surface membrane and then diffuse throughout the body of the parasite. We present a hypothesis that the internal cells of the body of the schistosomulum represent a new host-parasite interface, at which skin-derived growth factors may stimulate receptors on internal membranes during transformation of the cercariae into the schistosomulum

TAS Orders, Innovations and Challenges in Futures Markets

Futures contracts and futures exchanges were developed a long time ago in the process of evolution of commodity trading. They were created with the purpose of facilitating the buying and selling of commodities. Despite challenges along the way, they helped make commodity trading faster, easier, and more efficient for many buyers and sellers. Still today, futures exchanges are constantly looking for new ways to adjust to new developments in commodity markets and further facilitate trading. After all, as we have previously discussed in this space, futures exchanges provide a service to buyers and sellers, i.e., the marketplace to trade futures and options contracts. More trading in this marketplace means more profits for futures exchanges

How Much Money Can We Lose in Grain Markets?

Price risk in the soybean and corn markets was discussed in this newsletter last December (Cornhusker Economics, 12/04/2013 and 12/11/2013). Now we’ll follow up with a discussion about another way to measure risk in commodity markets. This measure essentially tries to answer the question “How much money can I lose over a given period of time?” as compared to the measures on price variability that we discussed last month