Kaldor (1939) and Working (1948,1949) note that a commodity's backwardation is very much related to temporary scarcity. To them, the obvious measure of scarcity is the current level of inventories relative to a normal level. In 1987-2007 data, however, the spot price has become much more...

This paper revisits the asymmetric effect of the basis on commodity spot and futures price volatilities documented by Kogan, Livdan and Yaron (2008) and Lien and Yang (2008). Kogan et al. (2008) show both theoretically and empirically that, for a non-storable consumption good, the relationship...