Corn futures

Corn futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of corn (e.g. 50 tones) at a predetermined price on a future delivery date.

How to Start Trading Corn Futures?

To buy or sell corn futures, you need to open a trading account with a broker that handles futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as TD Ameritrade lets you trade futures and futures options as well. TD Ameritrade also provides a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.

Corn Futures Exchanges

You can trade Corn futures at Chicago Board of Trade (CBOT), NYSE Euro next (Euro next) and Tokyo Grain Exchange (TGE).

CBOT Corn futures prices are quoted in dollars and cents per bushel and are traded in lot sizes of 5000 bushels (127 metric tons).

Euro next Corn futures are traded in units of 50 tones and contract prices are quoted in dollars and cents per metric ton.

TGE Corn futures prices are quoted in yen per metric ton and are traded in lot sizes of 50 tones.

Corn future fall down

It's not unusual for corn to make a low in the first week of October, and post modest gains as the first wave of bearishness wears off. A slow start to harvest kept hedge pressure low so far, but will mean a lot of bushels coming on to the market in coming months. So expectations from this bounce should be modest, and viewed as a selling opportunity.

Corn futures for December delivery fell 1.1 percent to $3.445 per bushel on the Chicago Board of Trade at 10:36 a.m. Tuesday. Prices dropped to $3.43, the lowest for a most-active contract since June 2010. 

Corn Futures Trading Basics

Consumers and producers of corn can manage corn price risk by purchasing and selling corn futures. Corn producers can employ a short hedge to lock in a selling price for the corn they produce while businesses that require corn can utilize a long hedge to secure a purchase price for the commodity they need.

Corn futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable corn price movement. Speculators buy corn futures when they believe that corn prices will go up. Conversely, they will sell corn futures when they think that corn prices will fall.

Long-term trends favor lower prices into the spring and summer, unless weather intervenes in one of the major growing regions. The only negative to sales of inventory now is the potential to lose projected payments from the new farm program, Agriculture Risk Coverage, if prices continue an unexpected move. So, scale up selling is still warranted.