Geo Grain

1. The Basis Effects of Failures to Converge by Berna Karali, Kevin McNew, Walter N. Thurman
2. Basis Volatilities of Corn and Soybean in Spatially Separated Markets: The Effect of Ethanol Demand
   by Anton Bekkerman and Denis Pelletier
3. The Impact of Ethanol Production on Local Corn Basis by Kathleen Behnke

North Carolina State University has a premier faculty of empirical economists that focus on agricultural markets. For the past several years GeoGrain has been working collaboratively with faculty and graduate students on research projects that explore the dynamic relationships in cash grain markets.

Recent research by our team of investigators has explored convergence problems between cash and futures markets. Utilizing GeoGrain’s extensive cash price data, the team found that when the futures market prices failed to converge with cash market prices at the delivery location, there were widespread basis impacts across the country. In other words, farmers delivering to elevators far removed from futures market delivery points experienced similar negative price impacts as the futures market delivery location.

In an effort to better understand the complex relationships between transportation and regional grain pricing, GeoGrain has recently provided a research endowment to North Carolina State University. This project will help gain insights into the interrelationships between barge pricing and grain basis throughout the country.

GeoGrain’s President and Founder, Dr Kevin McNew currently serves as an Adjunct Professor of Commodity Markets at University of Maryland. In this capacity, McNew is a frequent speaker at University sponsored events around the state, and also provides analysis on grain markets for industry participants.

University of Minnesota in conjunction with GeoGrain provides an experiential learning project called Commodity Challenge (www.commoditychallenge.com). This internet-based learning environment allows producers to gain real-time experience utilizing grain marketing tools. Participants trade commodities on the futures, options, and cash markets to lock in prices, manage risk, and execute their marketing plans in a realistic trading environment. Just as in real life, participants pay commissions on their trades, pay fees for their stored crops, and sell to their actual local cash market prices. The end result is producers gain an understanding of how to execute their marketing plans and see the results in real-life markets.