Agronomy and Crop Sciences Commons^™

The Cost Of Forward Contracting In Mississippi River Barge Freight And Cif Nola Markets, Bradley John Isbell

Graduate Theses and Dissertations

Grain elevators often use paper markets to mitigate the risk of (or hedge) their cash grain positions, as well as establish a profit margin through basis trading. Typically, merchandisers use futures or forward contracts to perform these transactions. However, in order to liquidate a cash grain position, grain transportation must be arranged in order to deliver the grain to the buyer. For elevators located along the Mississippi River system selling to Gulf export elevators in New Orleans, that mode of grain transportation is most likely river barge. Contracts for barges are bought and sold by grain merchants either directly with …