Comparative Study On Hedging Effectiveness Of Soybean Futures Between China And America

Soybean is an important and traditional crop in China.After 2004,the annual output of soybean in China has been decreasing continuously,but the domestic demand is very large,so the import dependence of soybean in China is strong,and it has accounted for more than 70% of the global soybean trade.The largest source country of soybean import in China is the United States.The expansion of soybean trade deficit makes China’s soybean price vulnerable to the international market price fluctuations,leading to domestic soybean spot market instability.Futures market has the function of risk aversion,and the hedging rate is an important index to measure it.Soybean futures are important products both in the futures markets of China and the United States.Compared with the futures markets of two countries,China’s soybean futures market started late,developed slowly,and the market volume was small and not active.The United States soybean futures market had more advantages.Facing the current situation of Chinese soybean market,it is necessary to use futures market to avoid price risk and stabilize domestic soybean market.Therefore,the study on the hedging efficiency of China and the United States soybean futures can know the risk aversion function of China’s soybean futures market,and find the gap between China and the United States soybean futures market,so we can learn from the experience ofthe United States soybean futures market and promote the healthy development of domestic soybean market.In this paper,the status quo of soybean market in China and the United States,the development status of soybean futures market and the trading varieties and contracts of soybean futures market are compared,and I have studied the status quo of soybean trading in China and the United States.On this basis,I have collected daily data of Chinese and American soybean futures and spot prices from September 2011 to June 2018,and have estimated the hedging rate of Chinese and American soybean futures markets by using OLS,BVAR and ECM models,and have compared the hedging performance of the two countries.According to the research,the hedging performance of China’s soybean futures market is 2.18%,and that of the United States is 93.716%,so the hedging ability of China’s soybean futures market is far lower than that of the United States.At the end of the paper,I have analyzed reasons for huge difference in hedging efficiency between China and the United States.At last I have put countermeasures to promote healthy development of China’s soybean futures market.