Comparative Study On Price Discovery Function Of Corn Futures Market Between China And America

Corn is one of the three most widely cultivated crops in the world and it is also an important field crop in China.With the development of energy industry,the use of corn is more and more widely.Therefore,the good development of corn industry is of great significance to China.Since the introduction of corn futures in China from 2004,it had achieved good development for 12 years until 2016.There are no major fluctuations and it has played its price discovery and risk aversion functions.In the context of China's new economy,corn prices will become more and more market-oriented with the introduction of the new policy of corn industry.Corn futures market that related to corn will also play a more important role in the continuous development of the corn industry.Futures market has two major functions that are price discovery and risk aversion.The smooth realization of the risk aversion function is based on the price discovery function of the futures market that means the price discovery function of the futures market plays a decisive role in the overall operation efficiency and affects the smooth realization about other functions of the futures market.Therefore,it is necessary to analyze the price discovery function of corn futures market in China in recent years based on the current macroeconomic background and policy orientation.In this paper,the data of price discovery situation of corn from March 2014 to December 2016 will be selected and it will use empirical analysis,such as correlation analysis,unit root test,co-integration test,error correction model,Grainger model and Garbade-Silber model to analyze these data.It will gain the test results of China and the United states.Based on the comparison of the results of the two countries,on the one hand,we can understand the price discovery function of the corn futures market in China and the United States in recent years to compare the efficiency of futures market between China and America.On the other hand,the similarities and differences between China and the United States are analyzed by comparing the empirical results between China and the United States.Therefore,it is possible for us to have a more in-depth understanding about the present situation in China.This paper would put forward the corresponding policies and suggestions for the further improvement of China's corn futures market from following two aspects: the first one is price discovery function conditions and other related theories in futures market.The second is the characteristics of corn futures market in China and America.