Corn is an English word used to describe any type of grain. In many parts of the world, it is also known as “maize.” Maize was the name predominately used before grain was discovered in the New World corn futures news. The origins of corn have been hotly debated. Some estimates of when it was domesticated range as far back as 12,000 years ago.
Corn is among the most versatile and complex grains in the world, and corn production and distribution has changed the face of history. With 270 million metric tons of corn produced annually in the U.S. alone. Corn could be considered the most important grain crop on the planet.
Corn Future Contracts
Like every commodity, corn has its own ticker symbol, contract value and margin requirements. You must be aware of these key components and understand how to use them to calculate potential profits and loss to successfully trade corn futures news.
For instance, if you buy or sell a corn futures contract, you will see a ticker tape handle that looks like this: “C8X@601\’5.
This is just like saying “Corn (C) 2008 (8) November (K) at $6.0150/bushel (601’5)”. A trader buys or sells a corn contract according to this type of quotation. Depending on the quoted price, the value of corn commodities contract is based on the current price of the market multiplied by the actual value of the contract itself. In this instance, the corn contract equals the equivalent of 5,000 bushels multiplied by our hypothetical price of $6.0150, as in:
$6.0150 x 5,000 bushels = $30,075
Corn Commodities are traded based on margin, and the margin changes based on market volatility and the current face value of the contract. For example, to trade a corn futures news contract on the Chicago Board of Trade (CBOT), a trader may be required to maintain a margin of $1,350, which is approximately 4.5% of the face value.
Corn commodities take place in an open outcry format and electronically through the Chicago Mercantile Exchange (CME) Group (CME, e-CBOT), the Brazilian Mercantile and Futures Exchange (BM&F), Mercado a Termino de Buenos Aires (MATba), Dalian Commodity Exchange (DCE), Kansai Commodities Exchange (KANEX), National Commodity and Derivatives Exchange(NCDEX) and the Tokyo Grain Exchange (TGE).
Facts about Production
Approximately 525 million metric tons of corn is produced annually. With almost 260 million metric tons, the U.S. is the leading producer. China is a close second, producing more than 110 million metric tons a year. Producing 37.5 million metric tons annually, Brazil is a very far third. The only other grains that come close to corn in terms of production are rice and wheat.
Despite the widely diverse uses for corn, it is still primarily used as livestock feed. Throughout the U.S., cattle, chicken and hog ranchers depend on corn to maintain and fatten their livestock. A small portion of corn is diverted into corn syrup, new plastics and alcohol, and corn is also diverted to produce ethanol to create a cleaner, less expensive fuel source.