• Grain markets are among the most complex commodity markets."corntastic" is Copyrighted by Flickr user: Darwin Bell (darwin Bell) under the Creative Commons Attribution license.
  
  

History

• Demand for grain feed in Asia increased from 25.2 metric tons in the 1970s to 61.2 metric tons in 1980, 147 metric tons in 1990, and 163 metric tons in 1999. The demand for feed grain in Asia has grown at an annual rate of about 6.6 percent and has been a principal factor in the rapid increase in demand for world grain imports. Agriculture exports are expected to rise to record levels as China, India and other foreign nations fight for grains to eat and to feed livestock.
  
  

Considerations

• One way farmers are dealing with the surge in demand is by using futures contracts. They can also take a speculative, and more risky, approach and store grain without a contract commitment in hopes the markets will go higher. Growing demand for biofuel is another factor contributing to higher prices. World fuel ethanol production tripled between 2000 and 2007 and is expected to double again by 2017 to reach 127 billion liters a year.
  
  

Wheat

• Wheat is one of the many grain commodities. It trades under the symbol "W" and trades in both the futures and options markets at 5,000 bushels (~ 136 metric tons) per contract. The current prices for futures are going up, month over month, which indicates the market is anticipating an increase in demand over time. However, current good weather and ample crops have driven down the price of corn and beans in the near term.
  
  

Types and Geography

• In the United States, wheat is divided into hard and soft red wheat (used for bread) and durum wheat (used for pasta). Soft red wheat has a fine texture and a lower quantity of protein. It is best for bakery products such as cookies and cakes and can be found in grocery stores as "cake flour." The primary markets for soft red wheat in the United States are Arkansas, Missouri, Illinois and Ohio.
  
  

NYMEX

• The best way to glean information from the grain market is by analyzing futures trading. The NYMEX (New York Mercantile Exchange) classifies a number of different commodity products under the segment of "Grains and Oilseeds". These include: Corn, Mini-Sized Corn, Corn Swaps, Corn Calendar Spread Options, Wheat, Mini-Sized Wheat, Wheat Swaps, Wheat Calendar Spread Options, Soybeans, Mini-Sized Soybeans, Soybean Swaps, Soybean Calendar Spread Options, Soybean Meal, Soybean Meal Calendar Spread Options, Soybean Oil, Soybean Oil Calendar Spread Options, Soybean Crush, Oats, and Rough Rice. Each one of these can be tracked on the markets with a specific symbol.