Abstract
Commodity price comovements are an important issue in economics given their significant implications for food and resource sectors that directly influence social well-being. This study approaches this issue by focusing on daily cash prices of 182 corn markets from the seven largest harvest states in the United States for 2006–2011 by using correlation based hierarchical analysis and synchronization analysis, through which we can determine interactions and interdependence among these prices, heterogeneities in price synchronization, and their changing patterns over time. As the first study of the issue concentrating on prices of hundreds of spatially dispersed markets for a commodity of indubitable economic significance, empirical findings show that the degree of comovements is generally higher after November 2006 but no persistent increase is observed. Different groups of markets are identified, each of which has its members exhibit similar price dynamics. Certain markets show potential of serving as price leaders. Results here benefit food and resource policy analysis and design for economic welfare. The empirical framework has potential of being adapted to network analysis of prices of different commodities.
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