It might shock some readers that even though corn has a global usage and popularity, trading corn futures is not so common. As such, it is not offered by any broker, especially not with such good trading conditions and trading platform.
The corn market is open all year long, however as corn is a seasonal its high trading season is mostly during the summer. Corn is distributed and sold during the winter, which leaves the summer to speculate the growth value, estimated numbers and more. The first and perhaps the most influential report about corn is published in March by the United States Department of Agriculture (USDA). It refers to the expected amount of acres planted by the farmers, which naturally will impact the corn market price.
A corn market outlook will reveal that the US is not only the main producer of corn, but also its main consumer.
The most important thing to remember when trading corn futures is to pay attention to the seasons and to the weather. In some ways a corn trader needs to have some of the same mindset as a corn farmer. During the winter months action in the corn markets is fairly muted, but once spring (and the planting season) arrives the market wakes up. Trading throughout the summer can be volatile as every weather report in the corn producing regions has the potential to move corn prices dramatically in one direction or another.
Corn can be a good way to diversify trading, and can be especially fun and profitable in the early summer months, with prices typically reaching their highest levels in late June and July. Trading remains volatile throughout the summer, with prices typically reaching lows in October and November as the harvest season for corn increases supplies of the grain dramatically. Corn is also a play on increasing use of biofuels, and with countries around the world working towards increasing their use of ethanol over crude oil corn stands to benefit greatly in the coming years.
Traders can use two broad categories of analysis to trade corn, either technical analysis or fundamental analysis. However the most effective strategies tend to be technical analysis strategies. Because seasonality is so important in the corn markets a trend following strategy is often the best for corn traders. These strategies might include the use of the Relative Strength Indicator, or Bollinger Bands, of the MACD oscillator, or simply using moving averages. Traders should still keep an eye on things like the weather around key corn growing regions and the USDA reports, as both can have a strong influence on corn prices.
Not so popular amongst regular traders, the corn market brings with it niche Australia trading opportunities. It is important to analyse and monitor the reports, weather forecasts and perhaps also Crude Oil prices.
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