Research on the Mechanism of Corn Price Formation in China Based on the PLS-SEM Model

After the cancellation of the temporary corn storage system in 2016, the price of corn in China returned to market regulation, resulting in increased price volatility. This study focuses on monthly data from April 2016 to March 2023 in China. The partial least squares structural equation modeling (PLS-SEM) is employed to analyze the impact of corn supply and demand factors, substitute prices, monetary supply, international corn prices, and international energy prices on the volatility of corn prices in China. Results indicate that supply and demand factors are the most direct influencers of corn prices, with demand factors having the most significant impact. Monetary supply and substitute prices affect corn prices through the demand side. External factors mainly consist of international energy and corn prices. The impact of international energy on Chinese corn prices is achieved through international corn prices, which directly influence the prices in China. It is recommended to stabilize corn market prices by regulating corn supply and demand, to improve the monitoring and early warning mechanisms for international energy and corn prices, and to implement measures for prudent regulation of monetary supply.