Study of statistical characteristics and investigation of possible cross-correlation between agricultural product prices and temperatures

The prices of agricultural products are determined by many factors and complex mechanisms such as the fundamental laws of demand and supply, the agreements between governments concerning imports and exports, trading in international stock markets, the cost of raw materials etc. The supply is influenced by cultivation conditions that include many parameters: harvested area, the seeds, irrigation conditions, soil quality and moisture, weeds and diseases, fertilizers and mainly the weather conditions ( precipitation, temperature and solar radiation). As can be seen, the temperatures are one of the many factors that ultimately affect the price of an agricultural product and the purpose of this thesis is to investigate the possible correlation between the two variables. Furthermore, historical time series of the prices of soybean and corn and the temperatures in the region of their production are analyzed. A general conclusion is that the correlation between prices and temperatures is very weak and limited to some specific periods.