Study Of Corn Futures Fluctuations

With the deepening of international capital mobility and improvement of the global economic cycle, monetary policy and financial derivatives markets and other macro-economic factors, have closer relationship with agriculture and agricultural products, agricultural prices are not only affected by the relationship between supply and demand, but also the development of biomass energy and futures market transaction. In 2011, the international food category agricultural commodities prices rose significantly, and quickly led to other countries’ agricultural products through international trade and agricultural futures markets, the capitalization factors behind can not be underestimated, the agricultural capitalization means that products have been more than just a basic consumer goods, but gradually be treated as an asset for investments.Corn, as one of the representatives of agricultural commodities, has food crops property, forage crops property, and fuel crops property after being used for fuel ethanol like biomass energy. In addition, in recent years many literature and studies showed that changes in the dollar exchange rate, large numbers of speculative funds participating in the futures market and some other financial factors have become important factors affecting corn futures price changes. In this context, analyzing from the perspective of agricultural financial impact on corn futures prices and volatility factors characteristics, and strive to reveal the extent of the impact of financial factors and specific direction.This paper selects corn for study, maize to explore the impact of agricultural capitalization on the price volatility, and the futures market choose the worldwide pricing center of Chicago Mercantile Exchange, as it’s mature and acted as major international agricultural investment. Due to many factors influencing agricultural futures prices, and the definition of financial factors is wide and uncertain, so I intend to analyze from two aspects, one is to explore the impact of speculation in the futures market on corn futures prices.The Chicago Mercantile Exchange release reports regularly and it classified commercial transactions and non-commercial traders which represent speculative forces. By analyzing the reports I can explore the relationship between the price and speculative capital, and analyze the specific impact of international speculative capital on corn futures prices; on the other hand, the paper focuses on the linkage between capital markets and corn futures, as there are too many capital market factors and the links among each other are closely, combined with previous experience, this paper selects the money supply, consumer price index and the U.S. dollar index representing financial factors, analyzing its impact on corn futures prices. Finally, on the basis of empirical research, summarize futures market prices and the degree of capitalization in the corn futures market; finally propose policy recommendations and suggestions to China’s agricultural market.