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The Two Most Important Publications in the History of Commodity Market Research

A bit of commodity market research history is up today in this post. I mentioned a couple of weeks ago that I have a “Commodity Classics” section on my new professional website: One part of the section contains a hyperlinked list of all of the Wheat Studies of the Food Research Institute at Stanford that had to do with commodity futures markets ( All of the listed Wheat Studies are classics in their own right, but two of the studies tower above all the rest.

In 1933 and 1934 Holbrook Working published what I regard as the “ur” documents of the entire field of commodity futures market research. These incredibly detailed reports examine price relations in Chicago wheat futures markets relative to market conditions as represented by stocks of wheat. As far as I know, the reports contain the first published estimates of what is now known as the “Working Curve.” This famous curve shows the relationship between price spreads (the carry) and stock levels. Futures markets were often maligned at the time because it was hard to understand the variation in prices ACROSS futures contracts over time. Many argued that the variation made no economic sense and was simply the result of speculative influences. Ahhh. Those evil speculators. Holbrook Working blew up that argument in these studies. The ideas and estimates in these reports still form the core of our understanding of how commodity futures markets for storable commodity markets work. A remarkable achievement.

And to think these two reports were published almost 90 years ago. What you see below is a picture of two original copies that I came to possess. How is an interesting story. FRI had a very nice library and when the Institute was disbanded in the mid-90s virtually everything was to be thrown out. Anne Peck was still there and she tried to save what she could. So these two original copies arrived in the mail at Ohio State (where I worked at the time) with a note from Anne saying that she could just not bear to see all of the Working Wheat Studies publications destroyed and she trusted me to take good care of these two. Thank you Anne for entrusting these incredibly important publications to me. I treasure them. Maybe I will frame them someday and hang them in my office. What do you think?

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