Japan imports almost all grains required except for rice and wheat. Japanese tends to get nervous about crop failures in major exporting countries.
The adjustment process of supply and demand is very complex. Grain producers are unable to increase supply offhand even if consumptive demand is boosted since they grow grains once a year. Grain importers have to wait for the next planting season.
We need to be prudent to apply a simple statistical model to the reality. However, we can learn the fact from experience that prices have the ability to assume certain outcomes over the long run. This paper can illustrate the adjustment process of supply and demand and how grain prices are to be determined in the market.
In order to analyze the price structure, the author has to address three critical points of reference, namely, fundamental, technical, and political market forces. Technical factors impact on the grain market once in a while. A typical example manifested itself in 2015. As for fundamentals, prices move seasonally. Firstly, weather markets June through August and secondly, demand-oriented markets October through December - November through March the size of Southern hemisphere crops will affect prices in that period.
Demand and supply are closely related to global stocks which act as a buffer in the price determination process. Global ending stocks play an important role in market. In addition, prices are influenced by the weather and a certain balance between demand and supply. Supply is a function of the weather and producer price - the author notices it as average farm prices. Higher prices encourage producers to grow more profitable grains. Demand increases on account of government policies or regulation changes as well.
Close, careful, extensive, multi-directional observation of grain prices can teach us a lot.
抄録全体を表示