Commodity futures prices lean hog futures rose 1

Lean hog futures rose 1.8% to $77.25 per hundredweight. Commodity futures prices in livestock sectors are supported by strong U.S. domestic demand and lower feed costs. Oil and natural gas are inherently volatile commodities, with prices relatively weak over the past three years. Cheng et al. ( 2014 ) conducted an empirical study indicating that the financial crisis forced a redistribution of risk between financial traders and hedgers, where the groups more capable of bearing risk absorbed the primary risks that existed prior to the crisis. This conclusion is predicated on the assumption that changes in the panic index VIX can serve as a proxy variable for the new risks introduced by financial traders. However, in reality, if hedgers are concerned about the risk exposure of their futures positions, they will adjust their inventory levels, thereby altering the convenience yield. Since the effect of convenience yield has not changed before and after financialization, the findings of this paper do not support the aforementioned conclusion. This is likely because the intermediary pricing model used by Cheng et al. is more suitable for application during financial crises. Nevertheless, between 2003 and 2017, which includes the financial crisis of 2008, the characteristics of the convenience yield factor for commodities did not undergo significant change. The Chicago Board of Trade reported that commodity futures prices for corn fell 0.5%, closing at $4.81 per bushel. Weather forecasts showing improved crop conditions in the Midwest pressured near-term pricing outlook.