Futures contract that behaves similar to Corn

Discussion in 'Commodity Futures' started by seldin, May 17, 2005.

  1. seldin


    My broker does not give me access to the Corn mini contract YC, only the big contract. However, the big Corn contract is sized way over what I want to trade.

    Since I can not access the smaller mini Corn contract, can someone recommend a Futures contract with volume that trades similar to Corn.

    Thanks much,

  2. All grains have similar characteristics. Look at the exchange info to see if the other markets (wheat, beans, oats) suit you. You will need to get educated as to how the weather market affects each one. Sorry to say I don't trade mini's so can't advise there. Margin on the full size contracts is not very demanding. Be careful that you are not undercapitalized. No matter which market you choose you will get hurt out if your account is too small.

    Good luck.
  3. seldin



    I will look at the other grains.

    Thanks for the input.

  4. What kind of a broker would restrict you from one contract of the a commodity but not of the other of the same commodity traded at the same exchange???
  5. Why not trade the big contract? At 2$ a bushel for 5000 bushels is only $10,000. If you "day trade" it and make sure your out before the market closes you should be alright because it doesn't move very much. (It trades while the pits are closed). Surely you can scrape $506 together to make initial margin
    If your hedging (not likely) then one contract should hedge about 25 acres of crop so as long as your not farming in Bruce County your fields should be at least that big.
  6. seldin



    Interactive Broker carries the big Corn contract, but does not carry the mini Corn contract.

  7. seldin


    Zf trader,

    I have only been trading 3 years, so I am a newbie. My current trades generally last several months. The problem with the big contract, is the risk, as it relates to my needs.

    I am learning to trade on Fundamentals. Currently, Corn is trading around 204. The multiplier is 5K. That's a contract size in dollars of 204 * 5K = $1,020,000. So a 1 point move, moves way too much for my comfort level.

    I presently trade several assets and the Corn contract being "so large" would carry too much risk for my comfort level.

  8. Its probably because the mini contract is traded electronically while the large contract is pit-traded. This is also true for Wheat.

    The spreads are much larger in the mini contracts and make them impractical for short-term trading. I would recommend trading the larger contract through a broker that provides access to the pit.

    BTW: The big Corn contract is valued at about $10K (204x50)
  9. seldin



    This is where it's confusing. My broker generally does not trade Open Outcry and really focuses on electronic trades, to market its discount fees. So that's why it's puzzling that they don't carry the smaller electonic contract.

    As far as the ZC "corn contract". My display shows a 5K multiplier. Way different than 50.

    To me, it's hard to imagine a 1 million size contract for Corn. I thought grains would be very small.

  10. That 204 above is in cents- NOT dollars.

    204 cents x 5000 bushels = $ 10,200

    Happy Trading.
    #10     May 18, 2005