What You Have to Know

Agriculture futures supply market individuals an unlimited array of hedging and speculative prospects. Whether or not you’re buying and selling Chicago Mercantile Alternate (CME) soybean, wheat, or reside cattle futures, there’s at all times a deep, unstable market at your disposal.

A few of the finest alternatives for ag merchants are within the corn futures market. Learn on to rapidly rise up to hurry on the ins and outs of buying and selling maize derivatives.

CME Corn Futures

In relation to buying and selling corn derivatives, the CME’s lineup of merchandise leads the pack. Provided by a CME subsidiary, the Chicago Board of Commerce (CBOT), two corn listings are featured: full-sized and mini corn futures.

CME Full-Sized Corn (ZC)

Full-sized CME corn (ZC) is among the hottest grain and oilseed contracts on the planet. For 2021, the ZC contract posted a median day by day quantity (ADV) upward of 350,000 and a peak open curiosity (OI) within the neighborhood of 1.7 million. Given these sturdy stats, full-sized corn is an exceedingly liquid market.

Listed below are the full-sized corn contract specs:

Image ZC
Market CME Globex
Dimension 5,000 Bushels
Minimal Tick ¼ of 1 cent ($0.0025)
Tick Worth $12.50 per tick
Listings 9 month-to-month contracts of March, Might, and September.

Eight month-to-month contracts of July and December are listed yearly after termination of the present 12 months December contract.

Settlement Bodily Supply
Buying and selling Hours Sunday-Friday 8 p.m. to eight:45 a.m. EST.

Monday-Friday 9:30 a.m. to 2:45 p.m. EST.

Observe: A buying and selling at settlement (TAS) contract is accessible for full-sized corn futures beneath the image ZCT.

CME Mini Corn (XC)

For merchants in search of a method to safe lowered corn market publicity, the CME presents the mini corn contract. At one-fifth the scale of full-sized corn, mini corn futures present the retail sector with enhanced granularity and a vastly lowered danger profile.

Listed below are the contract specs for CME mini corn:

Image XC
Market CME Globex
Dimension 1,000 Bushels
Minimal Tick ⅛ of 1 cent ($0.0025)
Tick Worth $1.25 per tick
Listings 9 month-to-month contracts of March, Might, and September.

Eight month-to-month contracts of July and December are listed yearly after termination of the current-year December contract.

Settlement Bodily Supply
Buying and selling Hours Sunday-Friday 8 p.m. to eight:45 a.m. EST.

Monday-Friday 9:30 a.m. to 2:45 p.m. EST.

Corn Market Drivers

Like all different commodities, corn futures function a group of distinctive underpinnings. Actually, most corn merchants and producers scrutinize the 2 following market drivers when in search of their monetary aims.

Provide & Demand

The U.S. is the world’s largest corn producer, exporting 10-20 % of its annual output. Greater than 90 million acres are planted with corn within the U.S., with a majority being situated within the Corn Belt. This can be a key component of the worldwide provide and demand image as a result of corn is a number one worldwide foodstuff, with 45.4 billion bushels forecast to have been consumed between October 2020 and September 2021.

Given a continuing demand for meals and vitality (ethanol), corn provides have a serious affect on pricing. Thus, opposed climate occasions resembling flooding or drought can severely cut back planted acres and output. Annual crop carryover ranges also can ship corn costs up or down.

Market individuals steadily use corn futures to deal with perceived supply-demand disequilibrium. The next are essentially the most fundamental types of these methods:

  • Bullish: If corn costs are anticipated to rise (demand is bigger than provide), market individuals could resolve to go lengthy ZC. Given this state of affairs, merchants would purchase a deferred-month ZC contract in anticipation of a sustained rally in worth.
  • Bearish: Within the occasion that corn costs are anticipated to fall (demand is lower than provide), market individuals could resolve to quick ZC. To perform this, merchants would promote deferred-month ZC contracts in anticipation of a sustained downtrend in worth.

USD Energy

Like all different commodities, corn costs exhibit sensitivity and a powerful detrimental correlation to the USD. Usually talking, when the USD strengthens, the worth of corn falls. In distinction, when the dollar weakens, corn costs are likely to rally.

From a sensible standpoint, there are numerous causes for a powerful or weak greenback. A couple of of the most important are central banking coverage, U.S. financial efficiency, or outliers such because the COVID-19 pandemic. Nevertheless, regardless of the state of the USD, corn futures can be utilized to deal with the greenback. Right here’s how:

  • Inflation hedge: During times of USD devaluation, traders typically purchase corn to hedge towards inflation. Accordingly, going lengthy ZC or shopping for name choices are viable inflationary methods.
  • Hawkish hedge: Quantitative tightening happens when the U.S. Federal Reserve (Fed) decides to boost charges, restrict entry to credit score, and cut back the cash provide. Amid such insurance policies, the USD is poised to achieve worth. In response, market individuals typically quick commodities resembling corn. To take action, one can promote ZC futures or purchase ZC put choices to capitalize on forthcoming bearish corn pricing.

Prosper within the Current by Studying from the Previous

Those that don’t know historical past are doomed to repeat it. The StoneX e-book Planting Disaster 2019 exhibits us precisely how the evolving supply-and-demand dynamic can sway corn costs dramatically. Don’t wait! Be taught the teachings of 2019 by signing up on your free copy right this moment!

Consult with one of our ag specialists

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