Convergence: A Mathematical Explanation

Storage Rate Disconnect Caused Cash, Futures Prices to Diverge

From 2005 to 2010, cash and futures prices for soft red winter wheat failed to converge at contract expiration. (DTN file photo by Pam Smith)
Lack of cash and futures price convergence, last seen in the soft red winter wheat market in 2005-2010, continues to be a possibility in today's markets. A recent economic study explained how the disconnect between cash and futures prices happened, and how...

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