An Empirical Study On The Relationship Between Corn Futures Market And Spot Price Fluctuation

Futures market is an important part of market economy system.The function of price discovery and risk avoidance in the agricultural futures market plays an irreplaceable and important role in the production,distribution and consumption of agricultural products in the world.At present,China's agricultural futures market has entered a stage of steady development.How to develop and perfect China's agricultural futures market and make the agricultural futures market serve for the reform of the economic system and serve the economy and society is a major issue.This article is divided into two parts.The function of the futures market is reflected in the two aspects of price discovery and risk transfer.The price discovery is the core,but also the value of the existence and development of the futures market.Whether the risk transfer function can play well depends on the effect of price discovery.In the first part,taking corn futures as an example,this paper conducts an empirical research on the relationship between the futures price of agricultural products and the spot price.Firstly,the paper analyzes the relationship between the price discovery function of the futures market and the spot price of the futures market.Then,using Johansen cointegration test,Granger causality test,Error correction model and econometrics method,the paper studies the relationship between futures price and spot price of agricultural products(maize)around the price discovery function of agricultural products(maize)futures market.Finally,it seeks to strengthen the strategic measures to enhance the function of China's agricultural futures market.The second part is to reduce the losses caused by the hedging transaction by forecasting the basis difference.One of the basic functions of the futures market is hedging,which provides an important way to avoid the risks brought by market price fluctuations.The essence of hedging is to replace the market price risk with a smaller basis risk.Therefore,hedging risk management is particularly important in hedging transactions.This article from the practical point of view,through the basis of corn futures modeling and forecasting,with better forecasting results to predict the future basis for the trend,strong or weak for hedging traders have some reference to the transaction risk value.Finally,this article from the practical application of some basic risk management recommendations.The empirical results show that: for corn futures,there is a long-term equilibrium relationship between the futures price and the spot price;the futures price has a bidirectional guiding relationship with the spot price;the short-term deviation between the futures price and the spot price has a more obvious impact on the spot price;The futures prices do not have a significant impact;changes in futures prices are mainly affected by the futures market,the spot market factors less affected,and spot prices changes in addition to the spot market factors,but also to some extent by the futures market factors;Through the modeling of the difference basis between corn spot and corn futures,this model is used to observe the future basis deviation to better avoid the price risk in the futures market.In order to further promote the function of China's agricultural futures market,a series of measures should be taken to improve the management and system of the futures market.