SONAR|HES-SO

SONAR|HES-SO

SONAR|HES-SO regroupe les travaux de bachelor et master diffusables de plusieurs écoles de la HES-SO. Consultez cette page pour le détails.

En cas de question, merci de contacter les bibliothécaires de la HES-SO : bibliotheques(at)hes-so.ch

Back to SONAR
Back
Mémoire
Bachelor thesis

Why can crude oil traders take advantage of a Super-Contango while agriculural traders cannot?

    2018

Mémoire de bachelor: Haute école de gestion de Genève, 2018

matières premières
pétrole
agriculture
bourse
commerce
English In 2009 and 2015, crude oil traders had the opportunity to take advantage of an arbitrage opportunity between the spot market and the future market, the phenomena is famous in the industry and is well known as Super-Contango. On the other hand, the same arbitrage opportunity was never observed in the grain andwe do not hear about any Super-Carry. This study aims to investigate what are the possible explanations that would prevent similar arbitrage opportunity to happen in the grain market and why a Super-Carry never occurred during the last decades. The author motivation to work on this project is mainly due to variety of possible researches that could be done as well as the wide range of possible parameters that must be considered. This research mixes the derivatives market, the physical market and also the inventory management of the commodities. The methods used to conduct the research is the collection of secondary quantitative data found in the balance sheet and income statement incorporated in companies’ annual reports. The analysis of the data has been conducted with the help of inventory ratio in order to understand the trends in term of inventory management between oil and grain firms. Ultimately the author had the opportunity to discuss with professionals that work for agricultural companies in order to collect qualitative data that helped the author to understand new perspectives and possible reasons that prevents Super-Carry from happening. The studies have shown multiple findings that could be help to answer the research question. The overall storage capacity compared to the daily average production is much more important in agriculture that oil and thus, under a situation of oversupply, oil tanks are quickly becoming full and as a result creates a lot of pressure on the spot price. Agricultural companies hold their inventory for longer period of time comparing to oil companies which means that storing grains is profitable for trading firms. Farmers have more incentive to own their storage facility compared to oil producers because the supply and demand balance is more predictable in agriculture due to the seasonality. As a result, there is much more players in agriculture than in oil that are capable of taking advantage of arbitrage opportunity. This research paper demonstrates that buying physical grains, store them and sold them forward is actually common in agriculture and because it is part of the usual manner of trading grains, the market structure prevents the arbitrage opportunity to become as profitable as it was in 2009 and 2015.
Language
  • English
Classification
Economics
Notes
  • Haute école de gestion Genève
  • International Business Management
  • hesso:hegge
License
License undefined
Identifiers
  • RERO DOC 323428
Persistent URL
https://sonar.ch/hesso/documents/314753
Statistics
Document views: 61 File downloads:
  • TDIBM_Loris_Beltramello.pdf: 164