work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. We thank Osmel Manzano, Guillermo Lagarda Cuevas, and Scott Irwin for helpful discussions, and brownbag seminar participants at the Inter-American Development Bank (IDB) and the U.S. Commodity Futures Trading Commission (CFTC) for helpful comments and suggestions. We are grateful to Casey Petroff for her help with the public trader position data, to Emré Robe for his help with the construction of the weather variables, and to Lutz Kilian for his help with indicators of global economic conditions. The first draft of this paper was written while Robe was a consultant to, and Covindassamy was a research assistant at, the IDB. Robe was also a consulting senior economist with the CFTC during the same period. No CFTC compensation was received, and no CFTC resources or proprietary information were used, for this project. The opinions expressed in this paper are those of the authors: they do not reflect the views of other CFTC staff, the Commission itself, or the United States government; or the IDB or the shareholder governments. Errors and omissions, if any, are the authors' sole responsibility. 1Sugar with your Coffee? Financials, Fundamentals, and Softs Price Uncertainty AbstractWe investigate empirically the factors related to price uncertainty in the markets for two key Central American commodities: coffee and sugar ("softs"). Specifically, we analyze the predictive powe...
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