Market Integration and Global Leadership in Corn Prices

Every year, Iran supplies a large amount of corn through imports, and this issue, along with the increasing trend of dependence on corn, has made Iran as one of the major importers of corn in the world. In this paper, by studying the price behavior of corn in the market of corn producing countries in the world, including Brazil, Ukraine, Russia, India, USA and Argentina, the hypothesis of corn market integration and the law of one price were tested. The data used were monthly and from September 2004 to December 2021. The results show that the global corn trade is formed in a fully integrated market and the data of each market like price fluctuation signals are transmitted to each other. In addition, the global corn market follows the law of one price and the goods of each market were perfect substitutes for each other. The price leadership test also showed that the United States has a leading role in the market due to the high production and supply of corn, and other producers adjust the price of their product based on the price discovered in the US market.