Why Is Persistent Backwardation Less Common in Non-Perishable Commodity Futures?

Persistent backwardation is less common in non-perishable commodity futures because it implies that the spot price is higher than the future price, suggesting a negative cost of carry or a shortage. Arbitrageurs can typically exploit this by buying the futures contract and selling the physical commodity, which pushes the spot price down and the futures price up.

The ability to store the commodity makes the reverse cash-and-carry arbitrage efficient, preventing persistent backwardation.