Hi.
At the bottom of page 28, the reading defines roll yield as the change in the futures price minus the change in the spot price of the underlying commodity. This makes sense.
It also defines backwardation as a downward sloping term structure of futures prices (i.e. each successive futures price is lower). This also makes sense.
The part I am having trouble grasping is that it states that backwardation predicts a positive roll yield. Is this a typo? It doesn’t make any sense to me how downward sloping futures prices could predict a positive roll yield… If somebody could either confirm that this is a mistake or help me understand the concept it would be greatly appreciated.