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Corn: current price, history, usage, chart

Updated on February 13, 2024

Interested in Commodity Trading? Then one of the economic commodities might interest you. Specifically, corn. In this article, we will introduce you to corn and trading with it. What is it actually used for? And how can you trade? We will tell you all this in this article. And we will also add information about what factors affect its value on the market.

Maize – properties and use

You certainly know corn. Perhaps each of us has eaten corn and some have even seen it growing in a field. But few people know that it is possible to make money from its trading. And that it can also be traded by small individual traders.

Corn is an economic commodity. It grows in the fields where farmers grow it. Rather than here, it is grown, for example, in the United States of America. More than half of the global production even comes from here. Other large growers are also China and Brazil. Around 500 tons of this cash crop are grown annually worldwide.

What is corn used for? Above all, of course, it will find use in the food industry. People have become very fond of this type of cereal as a food source. And in addition to being consumed raw, boiled or baked, it is also used to make, for example, corn syrup. It serves as a sweetener in addition to sugar. And let’s also remember cornstarch. However, it is not only eaten by humans. Corn is also a cheap and popular feed for farm animals.

But it is not only the economic industry that works with corn. On the contrary, the possibilities of its use extend much further. Let’s imagine, for example, its role in the chemical industry. Here it serves as one of the components for the production of biofuel and ethanol .

The history of corn

And how did mankind actually discover corn? It all started in Mexico approximately 10,000 years ago. It was then that the local residents bred it from wild grass. However, the original variety of corn differed from today’s in many ways. Especially in the size of the cob. Today’s corn has a much larger cob than the corn that was originally grown. And also in the fact that the corn of that time always had only one ear. Today’s varieties can have even more ears.

From Mexico, corn gradually spread throughout Central America and the Caribbean region. Maize is a nutritious crop and easily adapts to new conditions. And how did corn get to Europe? Similar to, for example, potatoes. The Spanish brought it from Mexico when Mexico was one of the Spanish colonies.

How to trade corn

Now you know the origin and ways of using corn. But let’s now look at the main thing that this article has to tell you. And those are her trading options. So let’s see how you can trade corn. And how to proceed in order to make the most of your investment in corn, if possible.

Before we start describing the individual ways of trading corn, let’s explain in what volumes and at what prices corn is actually traded. You will always buy and sell corn in bushels. That is, in such units, in which the volume of cereals is usually indicated. So no surprise. However, a different weight per bushel is set for each grain. For corn, 1 bushel equals roughly 25.4 kg of corn. The price per bushel is given in US dollars.

Physical corn

Corn can be traded on the commodity exchange. Similar to the trading of other types of commodities. Maize is even among the most traded physical economic commodities. Here, it is exchanged between its producers and those who further produce from the corn. So a commodity exchange where you can buy physical corn is for those traders who need to actually own the corn.

Futures contracts are most often traded on the commodity exchange. The point is that two parties enter into an agreement that a trade will take place in the future. Basic indicators are precisely defined in the contract. These include the date the trade will take place, the volume of corn, and the amount for which the corn will be exchanged. And why futures? Because this contract is usually beneficial for both parties. Both secure a price that suits them in advance. And thus insure against the fact that the price should rise significantly in the future. Or, on the contrary, to fall.

Another option for trading on the commodity exchange is options. Options work like futures. So it is predetermined that a predetermined volume of corn will be exchanged for a predetermined price. And on a clearly defined date. However, the difference from a futures contract is that with an option you can still decide whether or not you want to execute this trade before the given date.

Corn CFD trading

However, physical corn trading on the commodity exchange is not intended for traders who do not really need corn. They do not want to worry about its transport and its subsequent storage. They simply want to monitor market developments and then make money trading corn. Are you one of those traders? Then CFD trading is the ideal method for you .

CFD contracts have opened up the market to smaller traders and thus made their way to trading easier. Because when you trade CFD contracts, you are not actually buying or selling any physical asset. So if you buy 500 bushels of corn, no one will dump it in front of your house. Corn will only play the role of an underlying asset in CFD trading.

It works by speculating on the development of the corn price level. So when you find in your market research that the price of corn is expected to rise in the near future, you enter a buy position. If, on the contrary, you think it will go down, then you will enter a sell position. And what else? From now on, you will just monitor whether the price of corn develops according to your estimates. This will then affect whether you make a profit or a loss on the corn trade.

When trading CFDs, you conclude a contract with your broker. You both commit to paying the other party the difference between the purchase and sale price of the asset. In this case, corn. So when your guess is correct, the broker pays you. And you will make money on the trade. Otherwise, you pay the broker and lose money on the trade.

How to begin

Starting a corn business is not difficult. There is a really large number of online brokers on the market that allow you to enter CFD contracts on corn. But also on other assets. However, keep in mind that not every broker is the right one. Each of them offers slightly different trading conditions. And even fraudsters can easily be found among them. Therefore, first study them thoroughly and read as many customer reviews as possible.

Two more things are important to be successful in your corn business. The first of them is continuous monitoring of current market developments. Because that is the only way you will be able to be successful in your speculations. And the second thing that can help you a lot is a demo account. This is offered by the vast majority of brokers today. A big advantage is that it is possible to try trading in advance and familiarize yourself with the trading platform.

Beware of risks

No trading is ever without risk. And it is no different for corn investments. If we look at CFD trading, then one of the main risks is leverage. Trading with leverage is also often called margin trading. The point is that when you enter a trade, you put some of your funds into it. However, there may be a situation where you would like to trade a larger volume of corn than you can afford. In this case, the broker will finance the rest of the trade for you.

At this point you are trading with leverage. Its amount will depend on what share of the total trade the broker invested for you. And what is financial leverage? Financial leverage is such a tool that will cause your resulting profit to multiply. The higher the leverage, the higher the multiple. Be careful, however, that your loss will be multiplied in the same way.

What affects the price of corn

What factors affect the value of corn? First of all, of course, it is the ratio between supply and demand. The good news for you as traders is that the demand for corn has been slowly but surely increasing in recent years. This may be a good indicator for the future. It can be a good long-term investment.

Another factor that affects the price of corn is the weather. If there is too much drought, or too much moisture, the corn will not do well. This will cause the corn yield to be smaller and the value of the corn can be expected to increase accordingly. At that moment, the demand will exceed the supply.

Corn – current online chart

Take a look at the current online chart that shows you the development of the value of corn. You can see that in the long run the value of corn gradually increases. If we then look at the annual development of the corn price, we can see a similar curve every year. It depends on the harvest time. It is therefore possible to correctly time the entrance to the store following these regularities.

Development of interest in the commodity

The demand for corn has a big impact on its value. If we look at its development, we can see certain regularities every year. These arise from the fact that it is an agricultural crop that is harvested once a year. And that in the summer. So in the summer, we can see that the value of corn goes down in the summer. There is plenty of corn at this time and demand does not exceed supply. It’s the opposite in winter. In this period, the price of corn is the highest.

Maize – Summary

So if you want to trade corn, you can use the popular futures and CFD contracts. From a longer-term perspective, corn is a good choice. Its price gradually increases from year to year. Its wide use and ever-increasing demand for it is to blame. And this also in connection with the production of biofuels, in which corn plays a role. However, shorter-term trades can also pay off for you. Corn trading can be well timed according to the regular curve of the annual corn price development.

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