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The forward price at every moment in time is computed to prevent arbitrage, the value at inception of the contract must be zero.
If we denote the obligated delivery price after inception as K, then the value of long contract on an asset with an annual dividend yield of q is computed as: $\dfrac{S}{(1+q)^T}-\dfrac{K}{(1+r)^T}$
If interest rates rise, then the underlying assets will fall in value. That is, there’s a loss on both futures and forwards contracts. However, with futures, a loss from an asset price decrease will be recognized immediately (due to daily settlement). In that regard, a forward contract is more desirable and would be price higher.

1. Crude oil: easy to transport.
1. Natural gas: is expensive to store.
1. Electricity: is not generally a storable commodity. Due to that, arbitrage opportunities do not exist with electricity. In other words, futures prices on electricity can be much more volatile than financial futures.

The makets for those commodities that are storable are called as carry markets.
cash-and-carry arbitrage:
1. $F_{0,T}=(S_0+U)\times(1+r)^T$, where U implys storage costs.
1. $F_{0,T}=(S_0-I)\times(1+r)^T$, where I implys income(or we can say the storage costs are negative.)
1. The commodity forward price with an active lease market is expressed as: $$F_{0,T}=S_0\times[\dfrac{(1+r)}{(1+\delta)}]^T$$, where $\delta $ implys lease rate.
1. The forward price including a convenience yield is calculated as: $$F_{0,T}\geq (S_0+U)\times[\dfrac{(1+r)}{(1+Y)}]^T$$, where Y implys annualized convenience yield.
Convenience Yield (便利孳息) : The nonmonetary benefit of holding excess inventory. (which is only relevant (有效) when a commodity is stored. e.g., in a carry market.)
Lease rate is similar to the dividend payment in a financial forward, which can be negative.

$E(S_T)=F\dfrac{(1+X)^T}{(1+r)^T}$, where X implys expected return on futures position.
Recall that Systematic risk is a function of the correlation btw the return on the market versus the underlying asset. If the correlation is positive, then X should exceed r.
Normal backwardation (正常倒退): If the correlation is positive, X > r, thus $E(S_T)>F$.
Contango (期貨升水): If the correlation is negative, $E(S_T)<F$.

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