The spot price of yellow corn is $6.46 per bu. The futures price of the July corn futures is $6.33 per bu. This futures contract expires in 4 months. Suppose that the annual storage cost of corn is $0.58 per bu. The continuously compounded 4-month risk-free rate is 1.45% per year. Assume that corn is a true consumption commodity. What is the convenience yield for the July corn futures contract?

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The spot price of yellow corn is $6.46 per bu. The futures price of the July corn futures is $6.25 per bu. This futures contract expires in 4 months. Suppose that the annual storage cost of corn is $0.56 per bu. The continuously compounded 4-month risk-free rate is 1.86% per year. Assume that corn is a true consumption commodity. What is the convenience yield for the July corn futures contract? Answer: 19.42