The Learn About Futures Insider For September 1, 2011: Orange Juice

Relatively modern when compared to other agricultural products, orange juice futures are a versatile and often volatile market with unique fundamental and technical considerations. Fresh squeezed or mixed from concentrate, orange juice is a popular beverage across the world. The first juice production occurred early in the 20th century, and trading began later on the New York Board of Trade, where the market appeared in a particular feature film with Eddie Murphy and Dan Aykroyd. The frozen concentrated orange juice market has developed into a favorite focus for many traders and currently finds its home on the Intercontinental Exchange list of products.

Contract Size: 15,000 pounds of orange juice solids (3% or less)

Price Quote & Tick Size: Cents and hundredths of a cent to two decimal places; minimum tick is 5/100 of a cent per pound = $7.50 per contract therefore .10 represents $15.00 per contract

Contract Months: January, March, May, July, September, November

Trading Specs: Futures trade electronically only on the Intercontinental Exchange 0800 to 1400 ET.
Options floor trading hours are 1000 to 1330 ET.

Daily Price Limit: Ten cents per pound above/below the prior day settlement price. Limit is subject to expansion under certain conditions.

Trading Symbols: OJ, IOJ

Past performance is not indicative of future results.
***chart courtesy of Gecko Software
Orange Juice Facts
Orange juice is often sought out as a source of vitamin C and potassium. Folic acid and flavonoids are also purported to be healthful and inspire the juice drinking faithful. In North America, the image of oranges usually conjures up ideas of Florida, the principal growing area for citrus in the United States. Early Spanish explorers brought and planted the first citrus trees in the peninsula state, likely in the 16th century. Over the next few centuries, cultivation and groves spread across Florida and the state remains as the source for the majority of orange juice consumed in the United States. Oranges for retail are also grown in Texas, California, and Arizona and include different varieties such as Valencia, Navel, and Ambersweet. Navel oranges are actually the result of a mutation from an orange grove in a Brazilian monastery. The season for fresh oranges usually runs from October through to June.

On a global level, Brazil usually far surpasses the United States in production and exports. This orange producing giant provides orange juice for most world markets while US production is normally consumed domestically. In the following chart on production, only one year in the last two decades has seen US production rival Brazilian. In exports, the margin is far wider. Most citrus in Brazil is grown in the state of Sao Paulo.


Past performance is not indicative of future results.
*Data Courtesy of USDA/FAS


Past performance is not indicative of future results.
*Data Courtesy of USDA/FAS

As a point of reference for the US and Brazilian data on orange juice, consider the following charts showing the overall global production, import, export, and consumption:


Past performance is not indicative of future results.
*Data Courtesy of USDA/FAS


Past performance is not indicative of future results.
*Data Courtesy of USDA/FAS


Past performance is not indicative of future results.
*Data Courtesy of USDA/FAS


Past performance is not indicative of future results.
*Data Courtesy of USDA/FAS

Price highlights for this market include:

* A Florida freeze in January of 1977 led to a price spike in the OJ market from less than 80 cents to around $1.40. Prices had previously been brought low by the emergence and competition of ready-to-serve OJ.
* Prices dropped back towards 80 cents through the start of 1980 only to spike each time there was a freeze in Florida.
* By 1989, most orange groves had been moved further south so that the freeze impact was less severe each time. Through the start of the 1990s, an increase in Florida orange production and Brazilian tree inventories pressured orange juice prices back down below 80 cents.
* A keen real estate market, citrus diseases like canker and greening, and a series of hurricanes hit Florida's orange production, reducing the surplus. In the late 1990s and into 2007, production was trimmed by more than 40 percent to 129 million boxes. This boosted prices to fresh highs above $2.00.
* Prices sagged after that high, dropping back down below 70 cents at the start of 2009.
* Weather issues including Atlantic storms and freezes helped move prices back above $2.00 in 2011.

Key terms for the orange juice market include:

Grade A juice – a grading for frozen concentrated orange juice based on United States orange juice standards. Grade A juice has specific color, flavor, and appearance qualities that are scored. It will have a total minimum score of 90, and it must also reconstitute properly.

Brix value – A Degree Brix is a representation of the percentage of sugar content in a liquid, like juice.

While orange juice has an obvious end use, the by-products of orange groves and the production of orange juice are worth noting. Orange oil from pressed orange peels is used in household chemicals, food flavorings, and other fragrance products. Orange blossoms can be used for food and tea flavorings. Orange peels are employed by some gardeners as a slug repellent. The remains from squeezing out the juice can also be used as dehydrated livestock feed.


Disease and weather are of the upmost importance to orange juice producers and the following are the key areas of focus:

Hurricanes: Since Florida is the source of around 90% of orange juice in the United States, hurricanes heading towards the peninsula can cause significant interest. In the 1960s Hurricane Donna cut across Florida causing a loss of anywhere between 35 to 50% of the orange crop. In 2004, three hurricanes whipped across the state causing an estimated 30% destruction of the orange crop. Winds from hurricanes can cause direct tree damage as well as spreading disease.

Frost: Oranges are sensitive to cold temperatures and frost or freezing can devastate a crop overnight. Freezing temperatures have threatened groves and caused major crop losses since well before the 20th century. Due to the winter freeze of 1989, most growers have moved further south in Florida. The chill inspired exodus means most of Florida’s growers are in the southern region of the state. Usually, when a freeze is forecast, growers will spray fruit with a protective coat of ice to insulate against extensive damage.

Citrus Canker: This bacterial disease causes lesions on leaves, stem, and fruit and can cause oranges to drop early. Most countries in which infection has been detected are unable to export fruit to other countries and eradication programs have been implemented including destroying and quarantining infected trees. Despite a few times when the US has declared citrus canker eradicated, it has persisted and its spread is likely exacerbated by the winds associated with hurricanes. Canker has also caused significant losses of crop and revenue in Brazil.

Citrus Greening: Unlike canker, this bacterial disease can kill trees and greatly reduce production. Greening was confirmed in US groves in 2005 and has rapidly spread across southern Florida. The disease is primarily spread by two psyllid insects which feed on trees and carry the disease from infected to healthy trees. Symptoms include poor flowering, small blotchy leaves, and small and misshapen fruit with a bitter or sour taste. Citrus greening is also established in Brazil.

Besides these fundamental concerns, other factors can impact the price of orange juice. Consumer demand can be important to watch and, since juice is frozen and stored, the Cold Storage report from the USDA is also worth watching.
Disclaimer: There is a substantial risk of loss in futures trading and it is not suitable for all investors. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.learnaboutfutures.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Past results are by no means indicative of potential future returns. Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Information provided is compiled by sources believed to be reliable. Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.

The Learn About Futures Insider For August 25, 2011: Soybeans

Among the five sacred plants of ancient China, soybeans have expanded well beyond their original land of cultivation and now reign as the second most valuable crop in the United States. As a food product, soybeans have been alternately lauded for their potential health benefits and regarded with suspicion as to potential hazards. Overall, soybeans have a fair share of interest - as well as controversy - but are an important part of farming in both hemispheres.

Contract Size: 5,000 Bushels

Price Quote & Tick Size: Cents per bushel; minimum fluctuation is ¼ cent per bushel ($12.50 per contract)

Contract Months: January, March, May, July, August, September, November

Trading Specs: Trades open outcry and Globex (electronic) per the following schedule:
Electronic: 6:00 pm - 7:15 am and 9:30 am - 1:15 pm Central Time, Sunday - Friday
Open Auction: 9:30 am - 1:15 pm Central Time, Monday - Friday

Daily Price Limit: $0.70 per bushel expandable to $1.05 and then to $1.60 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.

Trading Symbols: Open Outcry - S; Electronic - ZS






Soybeans have been cultivated for food and other uses for nearly five millennia. Originally native to eastern Asia, the modern farming areas for this oilseed occur on nearly every continent. In the United States they were originally considered an industrial product and after their initial introduction to North America they were grown for hay. It was only during the twentieth century that America began to use soybeans as a food product. Noteworthy global distribution of production, imports, and exports is as illustrated in the following charts:



Since soybeans are produced in large quantities in both the northern and southern hemispheres, crop news and weather is relevant nearly all year. Cultivation is most successful in climates with hot summers and plenty of sunshine – up to and over 14 hours per day – can be important to the flowering stage of a soybean plant. The complete sowing to harvesting cycle for the modern soybean varieties can take anywhere from 80 to 120 days. Their growth cycle is roughly as illustrated:



Soybeans come in a variety of colors from black and brown to gray and yellow. Most commercial soybeans in the United States are of the yellow variety.

Price highlights for this market include:

- Soviet purchases of grains in 1972 sparked a rally in soybean prices that went from less than $4 per bushel to more than $12.
- A shift in the US government's policies and a jump in Brazil's soybean production led to a drop in prices after 1973's high.
Volatility remained, bolstered by the Soviet Union's 1979 grain embargo.
- In 1988, prices topped $10 per bushel again as drought was forecast to cut production by almost 40 percent. The following year soybean prices dipped back below $6.
- Prices peaked again in 1997, driven by strong exports causing concerns for potentially low ending stocks in the US.
- Bumper crops towards the end of the 1990s brought prices back down towards $4 per bushel.
- Back to back seasons of lower production, and damage from aphids brought renewed fears of low supplies of soybeans in 2004. This helped spike prices back over $10 per bushel.
- 2008 delivered fresh demand for soybeans in biodiesel and other applications, and flooding in US growing areas helped propel the market to fresh highs around $16.60 per bushel. A strong sell off ensued, but prices stayed above the levels seen in the early 2000s.


Key terms for soybeans include the following:

Crush spread – A spread trading strategy that involves soybeans vs soybean meal and oil.

Soybean rust – Often heard in the news as it is one of the diseases for which commercial soybean varieties lack resistance at this time. Infected plants can produce smaller yields and smaller beans. Rust is spread by wind and thrives in areas of high moisture and moderate temperatures. Infected plants are treated with fungicide.



Oil – Soybeans undergo a process to extract oil destined for a variety of processed foods and commercial products.

Livestock Feed – Soybeans are rich in proteins and the meal left over from oil production is used as livestock feed for everything from chickens and hogs to catfish.

Human Food – From infant formula to tofu, the number of products in supermarkets that contain soy have grown in recent years. Soy milk, soy yogurt, soy crisps, toasted soy nuts, and even immature pods that we refer to as edamame are a part of many modern diets.

Industrial and Commercial Products – Soybeans are a part of some surprising everyday items. From plastics to solvents, soybeans are even used to produce cloth. The idea of using agricultural products in industry is not as new - Ford was a notable early pioneer in non-food applications of soybeans. Soybean derivatives were added to plastic parts in Ford vehicles. The Ford Company was recently suggesting that soybeans can be used for producing parts for cars, namely car seats. Henry Ford is also credited with suggesting that an alternative to gas was needed.

Fuel – Biodiesel from soybean oil has been used for many years now and the recent increased fervor to produce alternative fuels may yield additional research for both new and used soybean oil.



Weather – As with most field crops, soybeans have sensitivities to light, temperature, and moisture. When planting, soybeans perform best when soil has warmed to 50 degrees Fahrenheit or better since they are susceptible to frost damage. Early planting in cool, wet soils reduces the likelihood of germination and increases risks of disease. During the full maturity stage, anywhere from five to ten days of dry weather are required to reduce moisture levels in the soybeans to less than 15 percent. Long storage periods will mean less moisture is desirable in beans to prevent mold and spoilage issues.

Genetic Modification – With the advent of biotechnology and the ability of scientists to adjust and modify plants for particular traits comes controversy over the impact on biodiversity. Roundup Ready crops allow farmers to sow seeds directly and possibly reducing soil erosion with no-till farming; however, there are theories that breeding the gene directly into many soybean cultivars may reduce genetic diversity, which can open up a whole host of problems - including disease resistance. Many countries do not allow GM crops, which causes export issues; especially when no GM stocks are cross contaminated with GM crops.

Disease and Pests – Again, as with most field crops, soybeans can play host to any number of plant and bean devastating molds or pests. Some diseases may destroy parts of the plant while others threaten the soybeans directly. Of the most widely recognized issues, a few are listed below:

Phytophthora Root Rot – Spread by spores from infected plants in soil and occurs most frequently in areas of clay soils and in flooded soils. Kills roots.

Soybean Cyst Nematode – A microscopic roundworm that infects soybeans roots and causes significant loss in soils where it is abundant – as much as 20 bushels an acre can be lost in a dry year and in sandy soils.

Septoria Brown Spot – A common leaf disease that can lead to up to fifteen percent yield losses. This fungus spreads in warm, humid weather.

With many pests and diseases, fungicides, crop rotation and early identification and proactive response can control and reduce risks to the crop.

Disclaimer: There is a substantial risk of loss in futures trading and it is not suitable for all investors. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.learnaboutfutures.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Past results are by no means indicative of potential future returns. Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Information provided is compiled by sources believed to be reliable. Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.

The Learn About Futures Insider For August 18, 2011: Us Dollar Index

Since the dawn of commerce and trade, currency has evolved to facilitate the process by providing a medium of exchange and helping people represent a store of value. The circulating medium, whether coins or paper money, was developed in many cultures. The U.S. dollar is a globally recognized hard currency. The U.S. Dollar Index is a measure of the value of the U.S. dollar against six major world currencies using a weighted geometric mean. U.S. Dollar Index futures are traded on the Intercontinental Exchange (ICE) and the CME, but for this lesson, specifications will refer to the ICE contract.

Contract Size:$1,000 x Index Value

Price Quote & Tick Size:US Dollar Index points, calculated to three decimal places .010 = $10; minimum tick size is .005 = $5 per contract

Contract Months: March, June, September, December

Trading Specs: Electronic Trading Hours 8:00 pm to 6:00 pm the following day on the Intercontinental Exchange (Sun - Fri) *the trading platform is available 30 minutes before the opening for order entry. Open on Sunday night is 6:00 PM ET; Pre-Open at 5:30 PM ET

Daily Price Limit: None

Trading Symbols: DX


Past performance is not indicative of future results.
***chart courtesy of Gecko Software

US Dollar Index Facts

The level of the U.S. Dollar Index indicates the average value of the dollar relative to the agreed 1973 base of 100.00, when major trading nations agreed to allow their currencies to float freely against each other. It is computed using the weighted average of currencies with a highly developed market.

The current basket of currencies used to calculate the U.S. Dollar index includes twenty countries: the fifteen nations in the Euro Zone and five other countries who make up the basis of global trade with the United States. The currencies and their relative weights are as follows:









Key terms for this market include:

Hard Currency – This term refers to a currency which is traded around the world and is seen as a stable store of value. This perception is usually based on the issuing country’s policies and its economic and political situation.

Quantitative Easing – Refers to a monetary policy which increases the money supply when the central bank buys securities and then infuses financial institutions with capital. The risks associated with this kind of policy include the possibility of hyper-inflation and devaluing the dollar.

Trade Weighted Dollar Index – An index created by the Federal Reserve that is a weighted average of a large number of currencies, far more than the ICE US Dollar Index. This index was created following the introduction of the euro.


Besides the obvious implications and uses for currency, the U.S. Dollar Index has investing applications as well. As a financial instrument, U.S. Dollar Index futures are often used as a means to hedge currency exchange risk. Since the U.S. dollar is such a huge part of international trade, this can be a significant market for other businesses as well.



Several factors within a nation can have a significant effect on the currency exchange rates and the relative importance of each is the subject of debate, however, it is important to be aware of some of the key fundamentals.

Inflation - It is generally believed that countries with consistently lower inflation exhibit a rising currency value while countries with higher inflation may see currency depreciation.

Interest Rates - High interest rates may attract foreign investors and that can lead to an exchange rate increase while the opposite scenario is possible in a country with low interest rates.

Overall Economic Conditions - Everything from a country’s balance of trade to the size of their deficit or surplus can serve as a barometer of the condition of the country and the likelihood of default. Investors look for countries with stronger economic foundations and the better the economic foundation of one country versus another may increase the value of the country’s currency.

Perception - The so called “flight to quality” exists within foreign currencies as investors will often seek what they perceive as “safe haven” currencies during times of political or economic instability.

Disclaimer: There is a substantial risk of loss in futures trading and it is not suitable for all investors. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.learnaboutfutures.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Past results are by no means indicative of potential future returns. Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Information provided is compiled by sources believed to be reliable. Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.

Learn About Futures Insider For August 11, 2011: Lean Hogs

Hogs – or pigs – are the humble livestock that have been domesticated for thousands of years. A global source of meat believed to be descended from the wild boars of Eurasia; pigs are unique in that they are likely livestock for settled farming communities rather than nomadic peoples since they are not easily herded for long distances. Pig, swine, shoat, piglet, boar, hog, stag, gilt, sow, or barrow; no matter how you describe them, these animals are an integral part of food and economics for many countries across the globe.

Contract Size: 40,000 lbs (`18 metric tons)

Price Quote & Tick Size: cents per pound; minimum fluctuation is $.00025 per pound ($10 per contract)

Contract Months: February, April, May, June, July, August, October, December

Trading Specs: Floor trading is conducted 9:05 am to 1:00 pm CT; Globex trading MON 9:05 a.m. - FRI 1:55 p.m. Central Time
Daily trading halts 4:00 p.m. - 5:00 p.m. Central Time

Daily Price Limit: $.03 per pound above or below previous day's settlement price; none for expiring
contract in last 2 trading days.

Trading Symbols: LH; HE on Globex


Past performance is not indicative of future results.
***chart courtesy of Gecko Software

Hog Facts

A larger percentage of hog production occurs in the Midwestern United States and the largest individual state production falls to Iowa, North Carolina, Minnesota, and Illinois. Modern hog farmers feed their swine a mixture of corn, wheat or soybean meal enriched with vitamins and minerals. A method of “finishing” hogs by feeding them nothing but corn prior to butchering them was adapted by colonists in early Pennsylvania.

Globally, production, imports and exports are distributed as shown:


** Data courtesy of USDA


** Data courtesy of USDA


** Data courtesy of USDA

Price highlights for this market include:

* Hog prices traded around $14 per hundredweight in the 1950s, prompting some Iowa politicians to call for the government to purchase supplies to help move prices back towards $18. Lows were attributed to higher production and slaughter.
* The removal of a price freeze spiked market prices in the early 1970s, only to see a reversal as production increased. 1975 saw another gain in prices on the backs of higher corn costs.
* Herd buildup and a move towards record slaughter numbers pushed prices below $30 per hundredweight by 1980. Prices eventually rebounded but remained choppy through the next decade due to ebbing consumer demand for pork.
* In 1997, An outbreak of hoof-and-mouth disease threatened herds in Taiwan, pushing the price of hogs higher as traders began to speculate that Japan would see a spike in import demand. In the US, concerns over mad cow disease boosted pork demand, adding to demand pressures.
* In 1998, hog production jumped by nearly 10 percent. Between the closure of some packing houses and an increase in commercial production houses, supply pressure tanked hog prices. Decade lows of nearly $20 per hundredweight would lead many producers to stop raising hogs.
* Hog production lows help prices climb again, only to sell off below breakeven prices in 2002. Price declines were blamed on larger herds and weak pork demand.
* Aggressive import demand from China pushed hog prices to fresh record highs above $100 per hundredweight in 2011.

Past performance is not indicative of future results.

Key terms for this market include:

Sow – female swine. They can give birth to a litter of pigs twice a year, with eight to twelve baby pigs per litter.
Farrowing – the name for giving birth to baby pigs
Thiamin – a “water-soluble vitamin of the B complex” which helps change carbohydrates into energy. Yeast and pork are the most concentrated sources of this vitamin.
Finishing – a process of feeding the hogs a specific food in the time frame leading up to slaughter

Key Uses

The obvious end use for lean hogs is meat (pork) however; the hide, hairs, and lard are also usable products. Pork fat may be found in weed killers, cosmetics, crayons, and other commercial products. Pork bellies are a food product for bacon or other dishes.

Key Concerns

In addition to the following variables, if you are trading lean hogs you will also want to be aware that the USDA issues a Quarterly Hogs and Pigs report that details domestic hog inventories as well as the birth rate and litter sizes for breeding sows.

Health: There are well over one hundred diseases and conditions which can affect hog health but many can be treated, managed, or controlled. Bigger issues include topics like H1N1 (Swine Flu) which can cause a decline in demand. Foot and mouth disease (hoof and mouth) can lead to large culls in livestock herds, cutting supply.

Feed Costs: Higher feed costs – particularly corn – can typically affect the weight and rate at which a farmer will take hogs to market. If farmers were to bring more hogs to market at lower weights to save on overall feed costs, this could increase supply and possibly depress prices.

Domestic and International Demand: Like other livestock, there are regional and religious preferences which can impact the demands for pork. Certain advertising campaigns can work to increase consumption and any health concerns associated with one type of livestock can possibly result in a substitutive demand for another. Trade agreements and available markets for US exports are also of fundamental interest as well as the recent suggestion that increasing wealth in developing nations also increases the regular consumption of meat. In recent headlines, particular viral diseases may also impact the marketing and demand for pork.

Disclaimer: There is a substantial risk of loss in futures trading and it is not suitable for all investors. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.learnaboutfutures.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Past results are by no means indicative of potential future returns. Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Information provided is compiled by sources believed to be reliable. Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.

The Learn About Futures Insider: July 14, 2011: Corn

According to Chicago Board of Trade history, the earliest “forward” contract for corn was recorded in 1851. This essential grain has come a long way since then in both everyday applications and futures trading. Since the first Amerindians cultivated it, corn has been an essential food product for humans and livestock alike. Modern technology has seen corn elevated to an industrial and fuel product, changing the supply and demand dynamic and causing more than one debate as prices soared to record highs.

Contract Size: 5,000 Bushels

Price Quote & Tick Size: Cents per bushel; minimum fluctuation is ¼ cent per bushel ($12.50 per contract)

Contract Months: March, May, July, September, December

Trading Specs: CME Globex: 6:00 pm - 7:15 am and 9:30 am - 1:15 pm central time, Sunday - Friday Central Time
CBOT Open Outcry: 9:30 am - 1:15 pm Monday - Friday Central Time

Daily Price Limit: $0.30 per bushel expandable to $0.45 and then to $0.70 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.

Trading Symbols: Open Outcry - C; Electronic - ZC


Past performance is not indicative of future results.
***chart courtesy of Gecko Software


Corn Facts
Since corn is produced in both the Northern and Southern hemispheres, there can be news all year round pertaining to crop development. Some of the key areas have growing seasons or crop years as follows:


The actual time from planting to harvest can vary by a few weeks and flooding and cold weather may cause delays. However, these growing season notes can be used as a reference point when considering key news events for corn.

In the US, the key planting regions are referred to as the Corn Belt, states where corn has been the dominant crop. In its broadest definition the area includes Iowa, Illinois, Indiana, and parts of Nebraska, Kansas, Missouri, Ohio, Wisconsin, Michigan, Kentucky, and the Dakotas.

According to the U.S. Department of Agriculture (USDA), stocks, production, imports, and exports for corn have recently been distributed per the following charts:


Past Performance is not indicative of future results. Chart data courtesy of the USDA.


Past Performance is not indicative of future results. Chart data courtesy of the USDA.


Past Performance is not indicative of future results. Chart data courtesy of the USDA.



Past Performance is not indicative of future results. Chart data courtesy of the USDA.

Price highlights for this market include:

* Early 1970s - Price lows of around $1.09 per bushel were reached as a stronger US dollar curbed exports and acreage in the US was hiked by 12 percent. Record production was forecast.
* $4 per bushel in the fall of 1974 on a freeze and perceived crop failures both domestic and international.
* Prices fell back down to $1.42 per bushel in early 1987, supports by news that key commodities had "huge stockpiles"
* In April 1996, prices rose above $5 per bushel - a fresh record - as the USDA reported stocks would be at record lows, down to 412 million bushels. An Associated Press story noted that was less than a three-week supply. By October, prices would see $3 a bushel again as the government agency reported strong stocks.
* Prices jumped to $7.65 in mid-2008, boosted by bio-fuel use in the US and subsequent flooding in growing regions. Prices were back down below $3 a bushel by December.
* Prices hit another new peak in June 2011 of $7.99 per bushel on a combination of strong exports, low ending stock forecasts, and a weaker US dollar.

Key terms for this market include:

Silk – Stigmas of the corn plant. Each silk connects to a potential kernel on the ear of corn and needs to be pollinated. Successful pollination usually occurs 4-5 days after the silk emerges. Moisture deficits can affect silk emergence. Certain beetles can also “clip” the silk.

Ethanol – Ethyl alcohol used for fuel. Corn gets about 2.7 gallons of ethanol per bushel. In recent years, around 17 percent of the corn crop in the US went to ethanol production.

Yield – In terms of growing corn, yield is usually expressed as bushels per acre. An acre is over 43,000 square feet. In Iowa, farmers might harvest upwards of 170 bushels per acre.

Metric Ton (MT) – Also known as tonne, is the accepted unit of mass for 1,000 kilograms (2,205 lbs.)

Key Uses

Ethanol – According to information from the National Corn Growers Association, 2.3 billion bushels of corn were used to produce 6.5 billion gallons of ethanol fuel in 2007. By-products of ethanol production include livestock feed for beef and dairy cattle, swine, and poultry.

Food Products – Corn is used in everything from corn chips and corn meal to starch, syrup, whiskey, yogurts, margarine, mayonnaise, and beverages. Corn starch provides an important component for cakes and cookies while corn syrup sweetens carbonated beverages and gives chewiness to candies.

Livestock Feed – It is estimated that 55 to 60 percent of the annual corn crop in the United States is used as livestock feed.

Thousands of other Uses - Ground corn cobs – relatively dust free and highly absorbent – are added to cosmetics. Resin from corncobs is used as solvents in dyes and lacquers. Starch is used in the production of spark plugs and rubber tires. Textiles can be produced from a corn fiber similar to polyester.

Key Concerns

Like most agricultural products, corn needs sufficient quantities of adequate weather, moisture, fertilizer (potash and nitrogen), and pesticides.

Key stages for the growth cycle, which for most corn hybrids is around 110 days for optimal yields, include:

Planting – this stage focuses heavily on soil moisture levels

Germination – Adequate soil moisture and temperature are critical to ensure germination.

Growth to Harvest – Once the corn plant has been established, weather and insects have marginal effect. During the four week pollination period, the corn plant is extremely vulnerable to drought. Early frost can interrupt the kernel filling and drying stages while extreme cold affects quality.

Pests and Disease - Corn diseases include downy mildew, stalk and kernel rot, common rust, brown leaf spot, and northern corn leaf blight. Diseases are usually divided into four general groups according to the affected plant part; seedling and root diseases, leaf diseases, stalk rot diseases, and ear rot diseases. Corn plants naturally have effective genetic resistance to many diseases and controls include planting resistant hybrids, crop rotation, and fungicides.

Pests include European corn borer, rootworm larvae, and black cutworm. Again, select hybrids can be used in management as well as insecticides.

________________________________________________

Disclaimer: There is a substantial risk of loss in futures trading and it is not suitable for all investors. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.learnaboutfutures.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Past results are by no means indicative of potential future returns. Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Information provided is compiled by sources believed to be reliable. Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.