A Structural Analysis of Global Corn and Soybean Markets from 2006 - 2017
Manzo, Angelo Anthony
This paper strives to analyze the driving factors of the monthly average prices of corn and soybeans between 2006 and 2016. The Global Food crisis of 2007 and 2008 subjected millions of people around the globe to increased levels of food scarcity. A wide array of academic studies have focused on the geopolitical and economic events of this time in an attempt to identify what caused such a rapid and dramatic increase in agricultural commodity prices. This paper in particular focuses on analyzing the biofuel policy implemented by the United States and other countries, with the intention of discovering a price relationship between agricultural and energy markets. The following analysis includes the use of structural vector autoregressive (SVAR) models to analyze factors that contribute to the price determination of corn and soybeans. These models utilize a structural form that is representative of widely supported economic theory. The variables included in both models are the United States Dollar exchange rate, global output, global stocks, and previously identified linkages amongst gasoline and biofuel prices. Results indicate that the monthly global prices of both corn and soybeans are highly affected by the value of the U.S. dollar, and the relationship amongst gasoline and biofuel prices. Surprisingly global output, and global stocks for each commodity are relatively insignificant in the determination of monthly average prices.
Just, David R.
Ifft, Jennifer Ellen
Applied Economics and Management
M.S., Applied Economics and Management
Master of Science
dissertation or thesis