A tale of two markets: Who can represent the soybean futures markets in China?

摘要

There exist two soybean futures markets in China Dalian commodity exchange (DCE), that is, No.1 and No.2 soybean futures markets (SB#1 and SB#2 for short respectively). Due to its dominant market share, trading volume and turnover, SB#1 is taken for granted to be the only representative of China’s soybean markets; so that, there is an implicit misconception in current literature that researchers can simply study the SB#1 to obtain the understandings of the whole China’s soybean futures markets and apply their findings in SB#1 to the whole soybean markets in China.?This article mainly doubted whether?SB#1 can represent China’s soybean futures markets or not, and provided empirical evidence that although, SB#2 only take small percentage in the whole market share, it is completely distinct from the SB#1. The study also found by means of information share (IS) model that instead of the previous misconception, SB#2 is much more important in that its information share is larger than its market share.