An Empirical Analysis on the Reason of Price Volatility in Agricultural Products: Market S&D or Financial Factor
Since 2007,the prices of agricultural products have fluctuated considerably and frequently,which triggers a focal debate over the reason whether market supply-demand or speculation is the fundamental factor for price volatility in agricultural products.Taking the corn for example,based on the U.S.corn futures price,this paper analyzes how market supply-demand and such as interest rates and exchange rates influence the price of corn.The results show that market supply and demand dominate the overall change in the corn price and financial factors have little impact on it.These years,the rise in speculative funds has increased not only the correlation between corn price and other financial markets but also the short-term fluctuation in corn price.