An Study On The Price Discovery Function Of Agricultural Product Futures Market In China

Agricultural futue market is an important part of farm product markets,it can help tofind the rational expected price and regulate the spot price.So the agricultural futuremarket can play a great part in stabilizing supply and demand in long-term. At present,there are still many problems in Chinese agricultural market, The phenomenon ofagricultural products"difficult to sell" and price fluctuate violently often happen, whichhas brought many negative effects.Therefore, this article is on the basis of existingliterature, study deeply the price function efficiency of China’s agricultural futures market,which brought an important practical significance to stable operation of the market andincrease China’s agricultural futures market position in the world.This pape chooses the Chinese agricultural futures market price discovery functionfor the study. Firstly, comparative analysis of three typical price discovery function theoryto explain why the futures market with the price discovery function. Secondly, the articleselected the soybean, sugar, cotton and oil future contract associated with people’s lives asrepresentative, twe use correlation test, unit root test, cointegration test, Granger causalitytest and the GS model test to make sure we can do empirical research on the pricediscovery function of Chinese agricultural futures. The results show that China’sagricultural futures market has had some price discovery function, but there are still manyshortages, the overall levelof the price discovery function is weak.According to empirical findings, the price discovery function of Chinese agriculturalfutures market is weak.However, it is very important to have a strong price discoveryfunction, and then the paper studied the United States how to use futures market pricediscovery function to adjust the agricultural product market and found out the deficiencesin comparison.Therefore, the paper point that we should further enhance China’sagricultural futures market’s price discovery function. This paper proposed to expand thesize of agricultural futures markets, and strengthen the agricultural futures marketregulation, cultivating qualified investors and optimize the structure of investors andimprove the agricultural countermeasures such as the spot market. And ultimately theagricultural futures market and spot market develop together.