Correlation Between International Crude Oil Futures And Chinese Agricultural Commodities Futures

Recent years,global climate warming problem that puts severe challenges to the survival and development of mankind.As the biggest developing country in the world,China has also begun to seek the transform method in energy utilization pattern.The 13 th Five-Year Plan focuses on the development of new energy sources and energy conservation and protection emerging industries.With biomass fuels that are made by agricultural products has become an important emerging alternative fuel of petroleum products,which promotes the rising of demand for mainly agricultural products such as soybean and corn,and leads to rise price of these agricultural products.Meanwhile,the volatility of price for petroleum-based fertilizers,pesticides,insecticides,farming machinery can also lead to price fluctuations of agricultural products,which will strengthen the co-movement between crude oil futures and agricultural commodities futures.As the degree of global economic integration becomes deeper,the information transmission effect between entity economy and financial market becomes remarkable,which also increasing the interactive effect between international crude oil futures market and the Chinese agricultural futures market.The co-movement effect between two different futures market refers to the internal communication mechanism of futures market,one of the market parameter variations will cause the new parameter variation in other one or several related market,and then become the mutual influence and interaction process in whole market system.As the vast agricultural country in the world,how to stabilize the price of Chinese agricultural products has become a matter of concern,and with the increasing policy-based financial support for agriculture,rural areas,and farmers,minimum purchasing price and reserve policy has become the country’s fiscal burden in recent years.But the excessive open-market mechanism will lead large volatility in agricultural price,which has extremely damage in market mechanism.Due to separate the formation mechanism and government subsidies of agricultural products,the only way leading to stabilize price of agricultural products is to improve the mechanism of agricultural commodities futures market,meanwhile,the volatility from international crude oil futures will lead huge shock to Chinese agricultural.So it is of great significance to study the interactivity of international crude oil futures and Chinese agricultural futures market.Because of the historical reasons and development features of Chinese futures market,the research about co-movement between two futures markets is lack of integrity,with the rapid development of our economy,the continuous improvement of the capital market and the promotion of the position in the world,the correlation between the futures market in domestic and abroad gradually enhanced which lead more and more researchers begin to study this field.This article conduct research for mean spillover effect(Information Transmission Mechanism)and volatility spillover(Risk Transmission Mechanism)effect between international crude oil futures and Chinese agricultural commodity futures,try to deepen the information transmission mechanism and efficiency of information transmission mechanism among two markets.