Simple and Multiple Cross-Hedging of Rice Bran

Abstract

Feasibility of forward pricing sales of rice bran via cross-hedging was investigated. Corn, oats, wheat, and soybean meal futures were considered as simple and multiple cross-hedging media. Simulation results indicated that simple cross-hedging using corn futures would be most effective in reducing price risks.

Using derivatives in major currencies for cross-hedging currency risks in Asian emergency markets

“…Cross hedging has been used most commonly to manage agricultural risks. Studies of such activity [e.g., Elam, Miller, and Holder (1986)] have shown that price risk or basis risk of commodities can be reduced by using futures contracts for different, yet related, commodities. The futures contract selected for the cross hedge may differ materially in location, type, grade, or timing.…”

Hedging Risk For Feeder Cattle With A Traditional Hedge Compared To A Ratio Hedge

“…Hedging risk can be measured by calculating the variation of the actual net price from a hedge about the target price. This concept of hedging risk has been used in practical applications (Hieronymus, p. 208;CBT 1978) and academic studies of hedging (Miller;Elam et al 1986). It is applicable for a traditional hedge as well as a ratio hedge.…”