when the commodity is non storable (storable) why is the term structure in backwardation(contango)?
it would seem to me that a non storable commodity should be in contango as people would want more of futures of that commodity as they cant store it hence resulting in upward pressure in prices of futures. Same goes for storable commodities as they can be stored a perosn would not want to have to pay extra price since he can easily store it and hence the futures/forward prices should be laxed as there is not much of demand.