GRAIN FUTURES (CORN, WHEAT, SOYBEANS)
Plain English
The grain complex (corn, wheat, soybeans) is one of the oldest and most important futures markets. These commodities feed the world. Prices swing on weather, USDA crop reports, export demand from China, and South American production. The USDA WASDE report is the 'earnings report' of ag markets.
Going deeper
Key grain contracts on CBOT: Corn (ZC) — 5,000 bushels, tick = $0.0025/bu = $12.50. Wheat (ZW) — 5,000 bushels, tick = $0.0025/bu = $12.50. Soybeans (ZS) — 5,000 bushels, tick = $0.0025/bu = $12.50. Key drivers: USDA WASDE Report (monthly — World Agricultural Supply and Demand Estimates; major market mover), Planting/Growing/Harvest conditions, La Niña/El Niño weather patterns (affects South American production), Export demand (China is by far the largest soybean importer), and Crush Spreads (soybean oil + meal vs. soybeans — the bean crush spread). Grain markets exhibit strong seasonal patterns — planting weather fears in May-June, harvest pressure in October.
Examples
WASDE Shock
USDA cuts corn yield estimate by 500 million bushels (drought reduced yields). December corn futures jump $0.50/bushel (from $4.50 to $5.00). One contract = 5,000 bushels × $0.50 = $2,500 move. Traders who positioned ahead captured significant gains.
China Demand Surge
China announces purchase of 10 million metric tons of US soybeans — a record. Soybean futures surge $1.00/bushel in a day. The soy complex (beans, meal, oil) all rally together, but meal and oil often move differently — creating spread opportunities.