Commodity futures markets: a survey

Abstract

This review article describes the main contributions in the literature on commodity futures markets. It is argued that modern studies have focused primarily on technical questions, with insufficient economic content. More research needs to be directed towards understanding fundamental economic issues such as why so few farmers hedge, the impacts of government farm programs on commodity futures, and the market impacts of commodity pools. The literature has failed to explain the prevalence of inverted markets in grains and oilseeds, and there is unexplainable price volatility in markets such as hogs and orange juice.