Date of Graduation

5-2026

Document Type

Thesis

Degree Name

Bachelor of Science in Agriculture

Degree Level

Undergraduate

Department

Agricultural Economics and Agribusiness

Advisor/Mentor

Andrew McKenzie

Committee Member

Michael Popp

Second Committee Member

Bruce Ahrendsen

Abstract

There have been few studies on post-harvest strategies related to hedging and speculation in futures and options markets and their returns in agricultural economic literature. In this thesis, we examine whether basis trading, a common strategy used by elevators to hedge their position, generates superior returns than simply storing physical cash grain following harvest and accounting for risk. Specifically, the purpose of my research is to study the returns and risks generated by each of these strategies using empirical analysis of the historical data of the post-harvest cash and future prices for the crop years from 1992-2020. The results of this study recommend that elevators hedge their grain post-harvest by taking an early futures basis position, which can generate strong returns and mitigate the risk of volatility in the cash market.

Keywords

Basis Trading; Agriculture Economics

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