The production of biofuels is limited in Canada, but the availability of wheat straw as a second-generation (i.e., cellulosic) feedstock is an exciting prospect for the future development of a biofuel industry. The future success of such a biofuel industry will depend on future ethanol prices and prices related to wheat straw. These prices are likely to be influenced by markets related to the existing first-generation ethanol industry in the United States. Therefore, the motivation of this paper is to investigate relationships between Canadian wheat prices and US corn, ethanol, and gasoline prices. We employ a DCC-MGARCH enhanced VEC model to investigate time-varying relationships among these markets. Results indicate that there are positive relationships between wheat and corn, ethanol and corn, and wheat and ethanol markets. Our results add to a better understanding of the level of integration between select Canadian agricultural markets and US energy markets. More specifically, the price relationships identified highlight several sources of price risk that may affect the financial success of commercially producing second-generation ethanol from wheat straw in Canada. This information will be of particular interest to prospective industry investors and policymakers.

中文翻译：

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加拿大第二代生物燃料产业的价格：加拿大小麦与美国能源和农产品之间的市场联系

加拿大的生物燃料生产有限，但小麦秸秆作为第二代（即纤维素）原料的可用性是生物燃料行业未来发展的一个令人兴奋的前景。这种生物燃料行业未来的成功将取决于未来的乙醇价格和与小麦秸秆相关的价格。这些价格可能会受到与美国现有第一代乙醇行业相关市场的影响。因此，本文的动机是调查加拿大小麦价格与美国玉米、乙醇和汽油价格之间的关系。我们采用 DCC-MGARCH 增强型 VEC 模型来研究这些市场之间的时变关系。结果表明，小麦与玉米、乙醇与玉米、小麦与乙醇市场之间存在正相关关系。我们的结果有助于更好地了解加拿大特定农产品市场和美国能源市场之间的整合程度。更具体地说，确定的价格关系突出了可能影响加拿大从麦秆商业生产第二代乙醇的财务成功的几个价格风险来源。这些信息对潜在的行业投资者和政策制定者特别感兴趣。