What are corn futures?

Futures markets are markets that are involved in the promise to buy or sell a specified commodity at a specified price in the future in the future. They built as a way to protect themselves somewhat from prices on the basis of external forces, such as the demand for corn on the market. The earliest modern Futures market was created in Japan Osaka as a way of selling futures rice. In the United States at the beginning of the 19th century, around Chicago, agricultural commodity markets emerged for sale futures, including futures on corn. The first forward contract through the Chicago Board of Trade (CBOT) was in Futures on corn and took place in 1951. The minimum size of corn contracts is 5,000 maize bushes and the price limit is set at $ 1,000 for contact above or below the final price. There are three stages of tradable bogs: number 1 yellow that is traded for 1.5 cents above the contractual price, number 2 yellow that is traded at the contractual price, and the number 3 of the yellow that tradesfor 1.5 cents below the contractual price.

corn futures are one of the main futures markets in the world, because corn is the basic grain used in the West, especially in the United States. Billions of USD worth futures on corn are traded every day through markets, helping to raise the price of corn and stabilize the market. Like other futures markets, not anyone who participates in buying corn futures, is interested in actually buying or selling corn. In fact, many people involved in corn futures simply do it as a way to make money through speculation.

There are two different reasons that could buy futures corn: securing and speculation. Provision is something that people who really want to buy physical commodity corn ordering to minimize their risk of loss of profit if the market shifts between the time they want toTop or sell a contract on corn, and the time they have corn at hand. Speculation, on the other hand, carries out investors as a way to take advantage of the transfer market to make money, using physical commodities only as a representative for the market itself. They never get their hands on the real corn; Instead, they are constantly buying and selling futures corn to try to use the market.

corn futures may be short -term or long -term burdened, depending on whether the contract concluded that the investor will sell corn or buy it. When someone briefly provides corn, it means that in the future they say that in the future they will sell a certain amount of corn at a specified price. If someone long provides corn, it means they say they buy it at a specified price. Someone who speculated on a short hedge will earn money if the actual maize price falls among the time to buy corn futures and the time when the contract appears while the long hedge will be profitable if the price of maize fromheight.

Hedgers use the corn's futures market in Tandem with a help market, a market that reflects the real corn price at present to ensure that no matter how the market moves, it will never lose money. In the stressed positions in the corn futures market and the corn point market, any loss that could suffer in one market is compensated by profits in the other and vice versa, so the money they earn are based solely on the physical commodities themselves.