Price Linkage, the Replacement of Supply and Demand and Policy Adjustment: Based on an Empirical Analysis of the Corn and Wheat Market in China

The fluctuations in prices of wheat and corn, who are both the important food crops, on the one hand reflect the comparison relationship; on the other hand also have an effect on both supply and demand market stability and policy adjustment. This article has carried on the empirical research on corn and wheat market in China, from the perspective of price linkage, the replacement of supply and demand and policy adjustment, with the monthly price data from January 1998 to December 2015. The results shows that, whether in a system of linear or nonlinear range, corn prices have a more important influence on wheat prices; it finds that the relationship between corn and wheat prices will affect the market supply and demand change, mainly for the replacement on demand of forage consumption and import supply; after implementing the corn market pricing and subsidy policy, the price of wheat formation mechanism also needs to improve in time-.