BMF Cash Corn Sep '22 (XEU22)
|Contract||Cash Settled Corn|
|Tick Size||BRL 0.01 cent per 60-net kilograms (BRL 4.50 per contract)|
|Daily Limit||Consult Exchange|
|Contract Size||27 metric tons or 450 bags of 60 kilograms each of corn in bulk|
|Months||Jan, Mar, May, Jul, Aug, Sep, Nov (F, H, K, N, Q, U, X)|
|Trading Hours||9:00a.m. - 15:30p.m. (15:50p.m. - 6:00p.m. after hours T+1)|
|Value of One Futures Unit||BRL 450|
|Value of One Options Unit||BRL 450|
|Last Trading Day||The fifteenth business day of the delivery month|
Corn is a member of the grass family of plants and is a native grain of the American continents. Fossils of corn pollen that are over 80,000 years old have been found in lake sediment under Mexico City. Archaeological discoveries show that cultivated corn existed in the southwestern U.S. for at least 3,000 years, indicating that the indigenous people of the region cultivated corn as a food crop long before the Europeans reached the New World. Corn is a hardy plant that grows in many different areas of the world. It can grow at altitudes as low as sea level and as high as 12,000 feet in the South American Andes Mountains. Corn can also grow in tropical climates that receive up to 400 inches of rainfall per year, or in areas that receive only 12 inches of rainfall per year. Corn is used primarily as livestock feed in the United States and the rest of the world. Other uses for corn are alcohol additives for gasoline, adhesives, corn oil for cooking and margarine, sweeteners, and as food for humans. Corn is the largest crop in the U.S., both in terms of dollar value and the number of acres planted.
The largest futures market for corn is at the CME Group. Corn futures also trade at the Bolsa de Mercadorias & Futuros (BM&F) in Brazil, the Budapest Commodity Exchange, the Marche a Terme International de France (MATIF), the Mercado a Termino de Buenos Aires in Argentina, the Kanmon Commodity Exchange (KCE) in Korea, and the Tokyo Grain Exchange (TGE). The CME futures contract calls for the delivery of 5000 bushels of No. 2 yellow corn at par contract price, No. 1 yellow at 1-1/2 cents per bushel over the contract price, or No. 3 yellow at 1-1/2 cents per bushel below the contract price.
Prices - CME corn futures prices (Barchart.com electronic symbol code ZC) posted their low for 2021 in January at $4.7950 per bushel. Corn prices then rallied sharply into Q2 of 2021 and posted a 9-1/4 year high of $7.7650 a bushel in May. A surge in Chinese demand for U.S. corn supplies was a major bullish factor for corn prices in 2021. The USDA projected that China would buy a record 28 million metric tons of U.S. corn in 2021 as it looked to rebuild its hog herd that was earlier decimated by African swine flu. Another bullish factor for corn prices was a drought in Brazil, the world's second-largest corn exporter, as most of Brazil's growing areas only received 60% of their normal amount of rain due to a La Nina weather pattern. Corn prices retreated from that 9-1/4 year high into Q3 after the USDA, in its May WASDE report, projected higher-than-expected 2021/22 U.S. corn ending stocks and global corn ending stocks. Also, global corn supply concerns eased after Brazil's crop forecasting agency, Conab, projected Brazil's 2020/21 corn production at 93.4 million metric tons, above expectations of 89.4 million metric tons. Corn prices remained under pressure into September after the USDA in the September WASDE report projected that 2021/22 global corn production would climb to a record 1.2 billion metric tons, boosted by bigger harvests in the U.S. and China. The USDA also raised its U.S. 2021/22 corn ending stocks estimate to 1.408 million bushels from 1.242 million bushels and raised its global 2021/22 corn ending stocks estimate to 297.6 million metric tons from 284.6 million metric tons. Beneficial late-summer rain in the U.S. boosted U.S. corn yields as the USDA reported U.S. 2021/22 corn per harvested acre rose to a record 177 bushels per acre. That helped push the U.S. 2021/22 corn crop to 15.115 billion bushels, the second-largest ever. Corn prices then trended higher into year-end on signs of stronger corn demand. U.S. ethanol production in October climbed to a 4-year high of 1.107 million barrels as a rally in crude prices to a 7-year high sparked an increase in corn demand from U.S. ethanol producers. Also, renewed weather concerns in Brazil supported corn prices as the second year of La Nina curbed rain amounts in most of Brazil. Corn prices finished 2021 up +22.5% yr/yr at $5.9325 a bushel.
Supply - World production of corn in the 2021/22 marketing year is forecasted to rise +7.5% yr/yr to a new record high of 1.207 billion metric tons. The world's largest corn producers are expected to be the U.S. with 31.8% of world production, China with 22.6%, and Brazil with 9.5%. The world area harvested with corn in 2020/21 is forecasted to rise +1.3% yr/yr to 338.4 million hectares. World ending stocks of corn and coarse grains in 2020/21 are forecasted to fall by -4.6% yr/yr to 316.2 million metric tons.
U.S. corn production for the 2021/22 marketing year (Sep-Aug) is forecasted to rise +7.1% yr/yr to 15.115 billion bushels, the most since 2016/17. U.S. farmers are forecasted to harvest 85.085 million acres of corn for grain usage in 2021/22, which is up +3.4% yr/yr. The U.S. corn yield in 2021/22 is forecasted to rise +3.3% yr/yr to a record high of 177 bushels per acre. U.S. 2021/22 ending stocks are forecasted to increase +24.7% yr/yr to 1.540 billion bushels. The largest corn-producing states in the U.S. in 2021 were Iowa with 16.9% of U.S. production, Illinois with 14.5%, Nebraska with 12.3%, Minnesota with 9.2%, and Indiana with 6.8%.
Demand - World consumption of course grains in the 2020/21 crop year is expected to rise +1.9% yr/yr to a record high of 1.454 billion metric tons. The largest category of usage in 2020/21, aside from animal feed, will be for ethanol production (alcohol fuel) with 5.200 billion bushels, which is 78.5% of total non-feed usage. That was up +7.2% yr/yr. After ethanol, the largest non-feed usage categories are high fructose corn syrup (HFCS) with 6.4% of U.S. usage, glucose and dextrose sugars with 5.4%, corn starch with 3.5%, cereal and other corn products with 3.2%, and alcoholic beverages with 2.6%.
Trade - U.S. exports of corn in 2021/22 are expected to fall -11.9% yr/yr to 61.598 million metric tons. Brazil's corn exports in 2021/22 are expected to rise +120.5% yr/yr to 43.000 million metric tons. Argentina's corn exports are expected to fall -1.3% yr/yr to 39.000 million metric tons.
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