Corn is a cereal grain grown in many parts of the world and is classified as a major food staple. This grain is cultivated globally, with a significant concentration in South America. In the United States, corn is grown in nearly all states, but production and harvesting are concentrated in the Midwest, known as the Corn Belt.

Corn has many uses in daily life, serving primarily as food for humans and a key component in animal feed. Due to its high fructose content, corn is also used as a sweetener to produce corn syrup and corn oil. Additionally, corn is used to produce ethanol. U.S. factories produce over 50% of the world’s ethanol, with about one-third of the by-products from ethanol production becoming animal feed, typically in the form of distillers' grains, corn gluten feed, and cornmeal. Excess corn can be exported to countries that require this agricultural product.

Uses of Corn

Source: MXV

In Vietnam, corn is an important import product and a major component in animal feed. However, Vietnam annually imports a significant amount. According to the latest report from the USDA, Vietnam is estimated to import 12 million tons in the 2024/25 season, accounting for 6% and ranking 6th in the world. The April 2024 report from VietnamBiz indicates that wheat imports decreased by 20.9% compared to last year to 808,186 tons; corn imports increased by 13.6% to 661,615 tons; and soybean imports slightly rose by 2% to 222,830 tons.

The high import demand is due to insufficient domestic supply, with production trending downward since 2015. The 2022 Statistical Yearbook estimates that corn production in 2022 reached over 4.4 million tons, compared to nearly 5.3 million tons at the peak in 2015. Corn imports to Vietnam mainly come from three markets: Argentina, Brazil, and India, with Argentina being the largest supplier of corn to Vietnam.

Domestic corn production has been trending downward each year

Source: Statistical Yearbook 2022, General Statistics Office (GSO). 

Corn derivatives

The first corn futures contract began trading on the Chicago Board of Trade (CBOT) in 1877. Futures contracts allow investors to buy or sell corn at a specified price at a future date. This is an effective tool for hedging price risk, especially for importers, and helps diversify investment portfolios. Corn futures are highly liquid and are the most traded agricultural commodity, with an average of 350,000 contracts traded daily; open interest (OI) can peak at 1.7 million contracts, according to CME Group. The specifications for corn futures at MXV, connected globally, are described below.

Source: MXV

In addition to futures contracts, corn can also be traded through CFDs (Contracts for Difference). CFDs offer high flexibility, allowing investors to easily access the market and use leverage to enhance profits. However, CFD trading also comes with higher risks due to leverage and significant price volatility.

At IFC Markets, corn futures are priced in US dollars for 100 bushels (1 CFD contract equals 100 bushels, and 1 lot equals 200 contract units). One bushel is a unit of volume and weight: 35.2391 liters (in the US), and 1 bushel of corn is equal to 25.4 kg. The XTB platform provides a description of CFD trading as follows. Here, the spread is the smallest possible difference between the Bid price (the price at which the product can be sold) and the Ask price (the price at which the product can be bought). For example, if the Ask price for gold is 1,875.50 and the Bid price is 1,975.95, the spread is 45 cents.

Source: Internet

Source: Compiled