Corn price volatility and income protection for producers
Objective: To estimate the indicator of the risk of the future price of yellow corn #2 of the Chicago Futures Exchange in the United States to the spot price of white corn in the main white corn producing regions of Mexico through the financial volatility indicator. Methodology: The research used the returns of the monthly time series for the period January 1998 to December 2020 corresponding to the spot price of white corn for five producer-consumer regions of Mexico and the futures price of yellow corn #2 listed on the Chicago Stock Exchange. To quantify volatility, the generalized autoregressive conditional heteroskedasticity model of order (1,1) was estimated. Results: The volatility indicator for yellow corn turned out to be 0.9870 for the futures price of quality 2 yellow corn. In the case of the spot price of white corn in Mexico, the volatility was 0.0.7977 for the national price; 0.3385 for the central region; 0.3206 for the western region and 0.0078 for the southeastern region, respectively. Implications: The high volatility of yellow corn #, close to unity, shows that the international market for this commodity is riskier than the national market or the regional markets in Mexico. Conclusions: The national white corn market showed to be more risky than the western, central and southeastern regional markets, showing a higher volatility indicator.
| Main Authors: | , , , , , |
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| Format: | Digital revista |
| Language: | spa |
| Published: |
Colegio de Postgraduados
2023
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| Online Access: | https://revista-agroproductividad.org/index.php/agroproductividad/article/view/2392 |
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