Corn is the most produced grain in the world, for many people, Corn has become a staple food and a major component in managing livestock. But corn is not only consumed and used for livestock. It can also be processed and used in various ways and even have a number of products, including fuel, like ethanol.
Corn or “Maize” is one of the most versatile and complex agricultural product there is in the world, and the production and distribution has greatly affected history, and annually there is a 270 million metric tons of corn produced by the U.S. Alone, with that being said, it is only considerable that Corn is the most important grain crop in existence.
Corn in the Market
Corn is not only used for human consumption, but it is also used to raise livestock not only that, Corn is also gaining popularity in the energy industry as an alternative to fuel, corn is a one of the main source of ethanol and has made people turn to alternative energy.
A Unit of corn is priced in dollars and cents with a tick size of one-quarter of a cent, which in general means that it costs around $12.50 per contract. Corn in the market is most active during the months of March, July, September and December.
Production of Corn
Approximately the production of corn in a year reaches about 525 million metric tons with the United States, China, and Brazil as the biggest producers of corn around the world. Corn is the most produced grain with only rice and wheat coming close to this product. Although there this grain has many uses, it is still mainly used primarily as a livestock feed.
Drivers of Corn’s Price
The United States Department of Agriculture is responsible for producing several important reports regarding the production and business of corn. Every year a Prospective Plantings report is released, which is dedicated to showing the details of how much and which crop will be planted by farmer for the upcoming season.
The North American Free Trade agreement added corn as one of its freely traded products, which caused problems on the Mexican economy because of the inequality between grants.
Because of its versatility, and its endless uses, the saturation of corn in the global economy makes it very price-sensitive to both supply and demand. Global shortages in production of this commodity and the demand for the product is a main factor in determining whether corn prices will rise or fall.