Open Access


Open Hours

Mon-Fri(09:00-18:00 hrs)

Resilience of Grain Storage Markets to Upheaval in Futures Markets

Emma Hayhurst

Consolidated Grain and Barge Co., Catoosa, OK, 74015, USA

B. Wade Brorsen

Department of Agricultural Economics, Oklahoma State University, Stillwater, OK, 74078, USA


Received: 14 March 2023; Received in revised form: 14 April 2023; Accepted: 20 April 2023; Published: 25 April 2023

Copyright © 2023 The author(s). Published by Nan Yang Academy of Sciences Pte. Ltd.

Creative Commons License

This is an open access article under the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) License.


The past two decades have had times when grain cash and futures markets did not converge during delivery. What was the economic impact of this non-convergence on storage markets? To answer this question the supply of storage is estimated for corn, soybeans, and wheat. The lack of convergence is measured using a historical basis. The econometric model shows no relationship between the supply of storage and the lack of convergence. Thus, empirical results suggest that markets were able to adapt to the lack of convergence. Overall, the research indicates the resilience of storage markets to structural change.

Keywords: Basis, Convergence, Hedging, Storage


[1] Adjemian, M.K., Garcia, P., Irwin, S., et al., 2013. Non-convergence in Domestic Commodity Futures Markets: Causes, Consequences, and Remedies [Internet]. United States Department of Agriculture. Available from:

[2] Garcia, P., Irwin, S.H., Smith, A., 2015. Futures market failure? American Journal of Agricultural Economics. 97(1), 40-64. DOI:

[3] Capitanio, F., Rivieccio, G., Adinolfi, F., 2020. Food price volatility and asymmetries in rural areas of South Mediterranean countries: A copula-based GARCH model. International Journal of Environmental Research and Public Health. 17(16), 5855. DOI:

[4] Goswami, A., Karali, B., 2022. The impact of fundamentals on volatility measures of agricultural substitutes. Journal of Agricultural and Applied Economics. 54(4), 723-768. DOI:

[5] Kaldor, N., 1939. Speculation and economic stability. The Review of Economic Studies. 7(1), 1-27.

[6] Working, H., 1949. The theory of price of storage. American Economic Review. 39(6), 1254-1262.

[7] Brennan, M., 1958. The supply of storage. American Economic Review. 48, 50-72.

[8] Cafiero, C., Bobenrieth, E.S.A., Bobenreith, J.R.A., et al., 2011. The empirical relevance of the competitive storage model. Journal of Econometrics. 162(1), 44-54. DOI:

[9] Van Huellen, S., 2018. How financial investment distorts food prices: Evidence from U.S. grain markets. Agricultural Economics. 49(2), 171-181. DOI:

[10] Garcia-Verdugo, J., Consuegra, M., 2013. Estimating functional efficiency in energy futures markets. Economics and Business Letters. 2(3), 105-115.

[11] Penone, C., Giampietri, E., Trestini, S., 2022. Futures-spot price transmission in EU corn markets. Agribusiness. 38(3), 679-709. DOI:

[12] Hatchett, R.B., Brorsen, B.W., Anderson, K.B., 2010. Optimal length of moving average to forecast futures basis. Journal of Agricultural and Resource Economics. 35(1), 18-33.

[13] Thompson, N.M., Edwards, A.J., Mintert, J.R., et al., 2019. Practical alternatives for forecasting corn and soybean basis in the Eastern Corn Belt throughout the crop marketing year. Journal of Agricultural and Resource Economics. 44(3), 571-590.

[14] Irwin, S.H., 2020. Trilogy for troubleshooting convergence: Manipulation, structural imbalance, and storage rates. Journal of Commodity Markets. 17, 100083. DOI:

[15] Goswami, A., Adjemian, M.K., Karali, B., 2022. The impact of futures contract storage rate policy on convergence expectations in domestic commodity markets. Food Policy. 111, 102301. DOI:

[16] Irwin, S.H., Sanders, D.R., 2011. Index funds, financialization, and commodity futures markets. Applied Economic Perspectives and Policy. 33(1), 1-31. DOI:

[17] Hayhurst, E., 2020. Resilience of grain storage markets to upheaval in futures markets [Master’s thesis]. Stillwater: Oklahoma State University. Available from:

[18] Li, J., Irwin, S.H., Etienne, X., 2022. Do extreme CIT position changes move prices in grain futures markets? Journal of Agricultural and Applied Economics. 54(4), 792-814. DOI:

[19] Williams, J.C., Wright, B.D., 1991. Storage and commodity markets. Cambridge University Press: Cambridge.

[20] Revoredo-Giha, C., Zuppiroli, M., 2014. Exploring the hedging effectiveness of European wheat futures markets during the 2007-2012 period. Procedia Economics and Finance. 14, 90-99. DOI:

[21] Karali, B., McNew, K., Thurman, W.N., 2018. Price discovery and the basis effects of failures to converge in soft red winter wheat futures markets. Journal of Agricultural and Resource Economics. 43(1), 1-17.

[22] Shi, R., Isengildina Massa, O., 2022. Costs of futures hedging in corn and soybean markets. Journal of Agricultural and Resource Economics. 47(2), 390-409. DOI:

Online ISSN: 2737-4785, Print ISSN: 2737-4777, Published by Nan Yang Academy of Sciences Pte. Ltd.