China Grain Futures Markets, The Basic Functions Of Empirical Research

The paper first summarizes the development and the present situation of China's grain futures market, and carries on a brief commentary on the theories related to futures market function. After then, makes empirical studies of the realization degree of China's grain futures market basic function.First, separately through the minimum variance hedging strategy and the maximum utility hedging strategy, researches the realization degree of China's grain futures market hedging function. Then, separately through the variance ratio method and the cointegeration approach, tests the efficiency and the unbiasbility of price discovery function, thereby identifies the realization degree of China's grain futures market price discovery function.The results suggest that hedging function and price discovery function in China's grain futures market have been realized, but still on a low level. In addition, China's grain futures market displays some features on the its realization of basic function: (1) The realization degrees of hedging function are different between the three grain variety futures market, because their market liquidity are different; (2) The grain futures variety's seasonal characteristic, causes their hedging effectiveness are different from different delivery monthes; (3) The existence of hedging expenses causes some grain futures markets with low hedging effectiveness to fall into a vicious circle; (4) The price discovery effectiveness of the grain futures market in short term is better than in long term; (5) The differences of market liquidity and cash market openness degree causes the differentces of price discovery function realization degree; (6) Restricted by cash market, the conflict exists between the efficiency and the unbiasbility of the wheat futures market price discovery function.Finally, on the basis of empirical studies' results, analyses the affect factors to the realization of the grain futures market's function, concludes that main affect factors involve: the development level ofgrain whole futures maket, the status of grain cash maket, the subject of investment in grain futures market, seasonal characteristic of the grain futures variety, the exchange system and the delivery system. According above analysis, brings forward some suggests about improving the realization of grain futures maket function.