The Grain Corporation And Futures Market In China

Following the process of reform in the grain distribution system, more and more grain corporations have lose protect of policy. They have to face to the risk of market and assume sole responsibility for its profits or losses. As the particularity in the grain area, the grain corporation will bear enormous price risk after losing protect of policy. So, it is very helpful to the development of grain corporations that solve the problem of price risk properly. Beginning from the grain market of china, this paper discussed the status of grain corporations,the peculiarity of grain management, and analyzed the risk of price that grain corporations faced in management. Following that, this paper point out that grain corporation could not decrease price risk if they only do business on grain market. At the second part, this paper introduced the basic theory of futures especially the theory of hedging in farm produce area. At the basement of futures theory, we analyze the factors that influence the price of grain futures. At the third and the last parts, we introduced the grain futures market and analyzed the foreground to invest in the grain futures market. Following this, the paper illustrated several modes to invest in grain futures market for the grain corporation and analyzed the case of hedging. The core idea of this paper is that the grain corporation should use the futures market on its own initiative in order to exert its advantages.