How to Buy Corn Futures
Although corn is mostly used as a feedstock for poultry and cattle, 40%of U. S. corn production is used as a blend for ethanol and 10-20% is exported, mainly to China.1
Here’s a guide on how to buy corn futures contracts.
Here’s a basic overview of how to get started
Contract Specifications for Corn Futures Contracts
Below are the specifications for a corn futures contract.
Ticker symbol: C is the root ticker symbol for corn futures. A specific contract is identified by adding the letter code for the month and the two-digit code for the year. For example, the full symbol for a September 2022 futures contract would be CU22, where U is the letter code for September and 22 represents the last two digits of the contract year.
Contract size: A full-size corn contract is 5,000 bushels. However, the Chicago Mercantile Exchange (CME) also offers a mini-corn future at 1,000 bushels.
Minimum price fluctuation: Contracts trade in one-quarter-cent (0.0025) increments, or $12.50 per bushel. A full one-cent move equals $50 per contract.
Trading months: The trading months for corn futures are March, May, July, September, and December.
Exchange: Corn futures contracts are traded on the Chicago Mercantile Exchange (CME).
Fundamentals for Trading Corn Futures
Margin Requirements for Corn Futures Contracts
Futures contracts are highly leveraged, meaning you can control a large value with a relatively small amount of capital. The CME initial deposit requirements for trading corn futures contracts range from 5-10% of the contract value.
The deposit requirements for the mini-corn contracts are one-fifth the amount of the full contract.
Corn Futures Trading Strategy
By studying the fundamentals, you can develop your own opinions on the directions of corn prices, and then look at technical indicators and price charts to support your predictions. You can open a TradeStation account and develop your corn futures trading strategy based on either fundamental or technical analysis, or a combination of both.
To learn about trading commodities and more, check out TradeStation’s desktop platform tools to test your strategies with back-testing or paper trading.
Sources
- U.S Department of Agriculture. “Feedgrains Sector at a Glance.“
- U.S. Department of Agriculture. “Grain Stocks.”
- U.S. Department of Agriculture. “Corn exports.”
- U.S. Department of Agriculture. “Corn Prospective Plantings forecast.”
Important Information: This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy.
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