Abstract
This paper examines the robustness of the Keynes-Hicks backwardation hypothesis for futures markets in a model that admits diversification and inflation protection as speculative motives. It presents a criterion in terms of the correlation of futures price with anticipated consumption net of other asset holdings for the Keynes-Hicks proposition to be true. The paper finds the effect of changes in net wealth and commodity demand on the risk premium, spread, open interest, and storage.