Editing Normal backwardation (section)

== Occurrence ==
This is the case of a [[convenience yield]] that is greater than the risk free rate and the carrying costs.

It is argued that backwardation is abnormal,{{Who|date=July 2010}} and suggests supply insufficiencies in the corresponding (physical) spot market. However, multiple commodities markets are frequently in backwardation, especially when the seasonal aspect is taken into consideration, e.g., perishable and/or soft commodities.

In ''Treatise on Money'' (1930, chapter 29), economist [[John Maynard Keynes]] argued that in [[commodity market]]s, backwardation is not an abnormal market situation, but rather arises naturally as "normal backwardation" from the fact that producers of commodities are more prone to hedge their price risk than consumers. The academic dispute on the subject continues to this day.<ref>Zvi Bodie & Victor Rosansky, "Risk and Return in Commodity Futures", FINANCIAL ANALYSTS' JOURNAL (May/June 1980)</ref>