Analysis of Factors Affecting International Prices of Grains and Soybeans

Abstract

The objective of this study is to examine how "supply and demand" and monetary economy affect international prices of grains and soybeans. The study uses ordinary least-squares. The study theoretically demonstrates that the stock-to-use ratio of grains, the price of crude oil, the number of index traders and the U.S.dollar real effective exchange rate have effects on prices of grains and soybeans. Second, we find that, with each item, their prices are quantitatively connected with other items. Third, the effect of fundamentals on the soybean price is stronger than that of technology. However, border measures and domestic protection around the world affect international prices, too.