Corn

Corn Fundamentals:The primary uses for corn are: animal feed, food, alcohol, ethanol, industrial usage and seed. Corn crops around the world have their own unique production cycles of planting and harvest timeframes. Grain prices tend to fluctuate the most during the growing seasons, as supply expectations can shift significantly due to planted acreage, weather and growing conditions. The grades of corn that are traded on the CBOT are mainly used for animal feed. The U.S. produces about 10-12 billion bushels of corn a year and is the leading exporter of corn. Corn is planted during April and May in the United States and it is harvested during October and November. Iowa, Illinois and Nebraska are the top corn producing states. Corn is also used to produce ethanol, which has led to a strong increase in demand for corn in 2006 and 2007.

United States (39 percent of world production) Planting: Corn crops are planted beginning in April and last into June. Harvest: Corn is mainly harvested in October and is finished by the end of November.

China (21 percent of world production) Planting: Corn is planted in mid-March through early June. Harvest: August through October.

European Union (8 percent of world production) Planting: Mid-April through early June. Harvest: Mid-August through late October.

Brazil (6 percent of world production) Planting: Early August through November. Harvest: February through May.

Argentina (3 percent of world production) Planting: October through November. Harvest: March through May.

Corn Reports:The seasonal low in corn futures usually occurs during or shortly after the fall harvest. November often marks the seasonal low in corn prices as large supplies are coming to market. Corn prices typically have a seasonal rally into the spring as worries over planting the new crop and weather tend to build a premium in corn futures. There are often sharp rallies during June and July as adverse weather, usually dry and very hot, can cause substantial damage to the corn crop during this timeframe especially mid-July.There are several reports from the USDA that are helpful in your research and trading of corn futures and options. Prospective Plantings - The first main report at the beginning of the corn growing season, released around the end of March. It summarizes how much and which crops the farmers expect to plant for the upcoming season. Monthly Crop Production - Released around the 10th of each month. The report gives an updated estimate of supply and demand for corn. Grain Stocks - Provides information on the current supply of corn and other grains in the U.S. and the world. Tips on Trading Corn Futures: Expect the summer months to be the most active and volatile for trading corn futures. Watch the weather in the Midwest for excessive heat or floods. Monthly crop reports are a big market mover. The reports are released from the USDA around the 10th of each month and analyze the supply and demand for grains. Monitor how quickly the corn crop gets planted around April and May. If it gets planted late, the corn crop may be smaller that year and the price could move higher. Avoid buying expensive options when the market is very volatile. Traders can bid prices to levels that may be sucker bets.