Commodity Futures: Does convenience yield and storage costs add or subtract to the futures value?

For a commodity future, the futures buyer has to pay certain costs that compensate for not carrying the asset. I know convenience yield is a reward to the physical holder, but storage costs are a burden.





How do we incorporate these things into calculating the financial futures value? Also, how do INTEREST RATES affect the futures value?





Thanks everyone.|||From the source, the cost of carry model forward price is given by


F = (S+s)exp((r-c)*t)


where S is spot price, s is storage cost, r is interest rate, c is convenience yield


and t is time to delivery. Increasing s or r will raise F, while increasing c lowers F.