The impact of ethanol on corn market relationships and corn price basis levels.

摘要

Corn market relationships were examined in Michigan, Kansas, Iowa and Indiana to determine if the increase in the percentage of corn used in ethanol production or the increase in the number of ethanol plants affected the annual degree of cointegration of corn prices at different grain markets in these states from September 1998 through June 2008. It was determined that corn price relationships at grain markets in the studied states were not affected by the increase in the percentage of corn used in ethanol production or the increase in the number of ethanol plants. Therefore, farmers and commodity traders were correct if they assumed the relationships between corn prices at different grain markets remained the same from September 1998 through June 2008.;Corn price basis levels were examined to determine if ethanol plant openings affected corn price basis levels at grain markets located at the site of an ethanol plant opening. On average, grain markets located at the site of an ethanol plant opening in Michigan and Kansas felt the largest corn price basis level increase at the time of an ethanol plant opening while grain markets located at the site of an ethanol plant opening in Iowa and Indiana did not experience substantial corn price basis level increases. Therefore, increased ethanol production increased corn price basis levels in Michigan and Kansas while corn price basis levels in Iowa and Indiana were relatively unaffected.