The Functions Of American Agricultural Futures Market And The Lessons We Can Draw From

Agriculture is an important industry for the subsistence of human beings.In the market economy,the supply&demand and the prices of agriculture products are normally affected by natural disasters and other factors,hence,the volatilities are normous.In order to solve the the sharp flutuaions of prices, people have discovered and created effective mechanism.after a long periond of exploraion,The futures market for agricultural products is the earliest futures market in theworld and it belongs to the financial service sector in terms of the business category.The most influential futures market for agricultural products in the world is ChicagoBoard of Trade.Since the end of 1980's,we have been paying attention to and studying the unique function of futures market in western developed countries and moved further to establish several futures markets for agricultural products in early 1990's.After more than ten years of improvement and rectification, the Dalian Commodity Exchange and the Zhengzhou Commodity Exchang are currently the dominant markets for agriculture commodity futures trading,which are crucial to our economic development.The American agricultural product futures market acts the important role in the global scope, the agricultural product forward price is obtaining the widespread application in the daily on-hand merchandise trade, if in the international trade contract the commodity price uses the base difference price generally, namely take these commodity forward price as the fixed price datum, increases one in this foundation to rise the agio.In addition, each large amount international trade all must carry on the corresponding hedge transaction through the correlation futures market, dodges the price risk.Not only foreign trader's this general procedure obtains one of bank loan basic conditions, moreover has become the general international convention.American Government when formulation macroeconomic policy like determination land fallow and agricultural product subsidy policy also the forward price took the important reference, specially in the agriculture protection policy implementation, will promote the order form agriculture and the agricultural product forward option transaction relates, will provide the risk exportation using the futures market for the order form agriculture, thus will protect the farm operator benefit effectively.The agriculture in the world scope all is the feeble constitution industry, the circumvention price risk, the gain stable income is a goal which the agricultural producer pursues generally。Looked from US's success experience that, the American agriculture high development, is the establishment above the commodity futures market hundred year development foundations.Looked on the futures market development foundation that, China and America have the very big similarity.Looked from the foundation variety that, China and America all are the principal commodities producer country and the expense country, all occupies the important status in the international market.The domestic each kind of large amount agricultural product marketability degree is more and more high, the commodity price markets gradually, the price undulation will be fiercer, each kind of market main body will need the futures market to avoid the market risk, will need the forward price instruction production management, this has also provided the essential condition for the futures market development.The American agricultural product futures market function display is widespread and full, US's experience is worth us profiting from very much, profits from the advanced experience, causes our country agricultural product futures market the function which the display should have in a greater degreeAgriculture commodity futures markent has two main functions,that are price discovery and risk aversion.This article is to explain the two functions and the role of agriculture commodity futures market to the China's agriculture economic development.The paper has six parts.The first section is an introduction ,it describes the background of the thesis topic, research purpose and research significance,and the research dynamics in and out of China.It also includes the dissertation research on the possible ideas and innovative methods.. In Section 2, it illustrates the emergence,foundation and function of the current futures markets.Section 3 details the function and significance of futures markets by using massive theoretical analysis.. In section 4, the article thoroughly explains the contribution of the primary goods futures market to the development of US agricultural economy.Section 5 details the contribution of the primary goods futures market to the development of PR China agricultural economy.Section 6 outlines the aspects that PR China primary goods futures market needs to improve, as well as the potential directions in the upcoming years.It also puts forward creative suggestions.This article talks about the importance of price discover function to allocate the resources and to arrange the agricultural production by studying the fuctions and significance of agricultural futures markets;it brings about that agricultural futures market well serves the specialisation and the Service Order in agriculture;also,it describes the mechanism of national food reserve and rotation in China; it points out the service model of Agricultural Development Bank working for "three rural" by futures markets and protecting bank credit funds ;besides by comparing the futures market both in the mainland and overseas,it puts forwards the developing innovative proposals for Chinese agricultral futures markets.