If you’re planning on trading corn, or any market for that matter, it’s important to have a full understanding of a commodity contract’s specifications.  This may be basic information, but it’s good to learn it like the back of your hand.

Corn futures contract specifications:

a)      one contract equals 5,000 bushels

b)      minimum tick is ¼ cent /bushel or $12.50 /contract

c)      contract months are Dec., Mar, May, July, and Sep.

d)     daily price limit is 30 cents

e)      outright speculative margin is $2,025 per contract

There are a couple of other things to keep in mind.  Trading hours for open outcry and electronic trading are 9:30 A.M. to 1:15 P.M. (all times CST).  The electronic platform also has a night session from 6:00 P.M to 6:00 A.M. starting on Sundays.  Electronic and open outcry contracts have different ticker symbols: electronic (ZC) and open outcry (C).

Note: A code for a commodity contract is as follows: (commodity)(month)(year).  Example: The commodity code for a December 2009 open outcry corn contract would be: CZ9.

A good strategy to look at if you’re just getting your started is using the mini-sized corn futures contract.

Mini-sized corn futures contract specifications:

a)      one contract equals 1,000 bushels

b)      minimum tick is 1/8 cent /bushel of $1.25 /contract

c)      contract months are Dec., Mar, May, July, and Sep.

d)     daily price limit is 30 cents

e)      outright speculative margin is $405 per contract

The smaller sized commodity contract gives you the capacity to start learning about trading with limited capital, and the ability to limit nominal losses from early mistakes.  These qualities can be to your advantage in a significant way.  Remember, the longer you stay in the game, the better chance you have at obtaining the knowledge necessary to making it as a commodity trader.  There are a few things to remember about the mini-sized corn futures contract.  Its ticker symbol is (XC) for electronic and (YC) for open outcry.  Trading hours differ slightly from the corn futures market.  Open outcry and electronic trading hours are open from 9:30 A.M. to 1:45 P.M. The electronic night session is 6:00 P.M. to 6:00 A.M.

Before you even consider trading, make sure you understand these commodity contract specifications inside and out.  Not only are your chances of success greatly reduced without this basic knowledge, but it would be very embarrassing to call your commodity broker and ask to buy a June futures contract.

Disclaimer: Trading in futures and options involves a substantial degree of a risk of loss and is not suitable for all investors. Past performance is not indicative of future results.