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This is the cover image for the 'Deconstructing Wheat Price Spikes: A Model of Supply and Demand, Financial Speculation, and Commodity Price Comovement' report.

Deconstructing Wheat Price Spikes: A Model of Supply and Demand, Financial Speculation, and Commodity Price Comovement

  • by Joseph P. Janzen, Colin A. Carter, Aaron Smith and Michael K. Adjemian
  • 4/29/2014
  • ERR-165

Overview

In 2008, wheat futures prices spiked and then crashed along with prices for other agricultural and non-agricultural commodities. This study uses an econometric model to explain the influence of various factors, including passive speculation by large traders, on wheat prices. Findings show that market-specific shocks related to supply and demand for wheat were the dominant cause of price spikes.

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