1. Corn
Corn is used not only for human consumption, but to feed livestock such as cattle and pigs. Also, higher energy prices have made people look at using corn for ethanol production.
The corn contract is for 5,000 bushels, or roughly 127 metric tons. For example, when corn is trading at $2.50/bushel, the contract has a value of $12,500 (5,000 bushels x $2.50 = $12,500). A trader that is long $2.50 and sells at $2.60 will make a profit of $500 (2.60 – 2.50 = $0.10, $0.10 x 5000 = $500). Conversely, a trader who is long at $2.50 and sells at $2.40 will lose $500. In other words, every penny difference equals a move up or down of $50.
The pricing unit of corn is dollars and cents with the minimum tick size of $0.0025, (one-quarter of a cent), which equals $12.50 per contract. Although the market may not trade in smaller units, it most certainly can trade in full cents during "fast" markets.
The most active months for corn delivery are March, May, July, September and December.
Position limits are set by the exchange to ensure orderly markets. A position limit is the maximum number of contracts that a single participant can hold. Hedgers and speculators have different limits. Corn has a maximum daily price movement of $0.20, up or down.
Corn traditionally will have more
volume than any other grain market. Also, corn will be less
volatile than beans and wheat.