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The Expansion of the Brazilian Winter Corn Crop and Its Impact on Price Transmission

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  • Fabio L. Mattos

    (Department of Agricultural Economics, University of Nebraska-Lincoln, Lincoln, NE 68583-0922, USA)

  • Rodrigo Lanna Franco da Silveira

    (Institute of Economics, University of Campinas, Campinas, SP 13083-857, Brazil)

Abstract

The purpose of this study is to analyze the impact of the growth of the Brazilian winter corn crop on the dynamics between domestic Brazilian prices and international prices as well as spot and futures prices in Brazil. Econometric time-series methods tests were applied using Brazilian spot and futures prices and U.S. futures prices. The statistical analysis found evidence that a long-run relationship between Brazilian and U.S. prices had developed, and the Brazilian futures market developed a more dominant role in the relationship between spot and futures prices domestically. These findings were particularly noticeable after 2002, when expanding corn production in Brazil was leading to greater participation in the international market (exports) and increasing trading in the Brazilian futures market.

Suggested Citation

  • Fabio L. Mattos & Rodrigo Lanna Franco da Silveira, 2018. "The Expansion of the Brazilian Winter Corn Crop and Its Impact on Price Transmission," IJFS, MDPI, vol. 6(2), pages 1-17, April.
    • Handle: RePEc:gam:jijfss:v:6:y:2018:i:2:p:45-:d:142628
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    2. José César Cruz Junior & Daniel H D Capitani & Rodrigo L F Silveira, 2018. "The effect of Brazilian corn and soybean crop expansion on price and volatility transmission," Economics Bulletin, AccessEcon, vol. 38(4), pages 2273-2283.
    3. David, S.A. & Inácio Jr., C.M.C. & Tenreiro Machado, José A., 2021. "The recovery of global stock markets indices after impacts due to pandemics," Research in International Business and Finance, Elsevier, vol. 55(C).
    4. Mattos, Fabio, 2018. "Thinking about the Corn Market," Cornhusker Economics 307051, University of Nebraska-Lincoln, Department of Agricultural Economics.
    5. Mattos, Fabio, 2018. "Do We Need More Futures Contracts in Commodity Markets?," Cornhusker Economics 307072, University of Nebraska-Lincoln, Department of Agricultural Economics.
    6. Sergio Adriani David & Claudio M. C. Inácio & José A. Tenreiro Machado, 2019. "Ethanol Prices and Agricultural Commodities: An Investigation of Their Relationship," Mathematics, MDPI, vol. 7(9), pages 1-25, August.
    7. Capitani, Daniel H D & Gaio, Luiz Eduardo & Mattos, Fabio L. & Franco Da Silveira, Rodrigo Lanna & Cruz, Jose Cesar, 2024. "Corn ethanol expansion in Brazil: Are volatility interconnectedness changing?," 2024 Annual Meeting, July 28-30, New Orleans, LA 343612, Agricultural and Applied Economics Association.

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