(a) What is the slope of the futures curve for cotton? Draw a future curve graph to support your answer.

(b) Are there positive returns to storage between Dec 21 and Dec 22? Draw a graph of supply and demand for storage to support your answer(where t=Dec21 and t+1=Dec 22).

(c) Suppose an unexpected typhoon destroys cotton crops in India. This causes a downward revision in the expected global cotton production in 2022. Assuming all else equal, will demand for storage of cotton in 2021 (St) increase, decrease or stay the same? Draw a graph of the demand for storage to support your answer.

(d) Using the same scenario from (d), do you expect the cotton market to still in contango, inverted, or could it be either contango or inverted? Draw a graph of supply and demand for storage to support your answer.

Suppose the cotton (a storable commodity) futures prices are currently: Expiry month December 2021 December 2022 Price c/lb 83 96 Suppose the cotton (a storable commodity) futures prices are currently: Expiry month December 2021 December 2022 Price c/lb 83 96