Corn Market

Table of contest Contents

History of corn .............................................................................................................. 3 Discovery of corn ........................................................................................................ 3 Importance as food ..................................................................................................... 4 Spreading in the world ................................................................................................ 5 Modern usage in other industries ................................................................................. 6 The product information about CBOT Corn Futures contract .................................. 7 Corn production ............................................................................................................ 8 Types of corn .............................................................................................................. 8 Crops and harvest ........................................................................................................ 9 Characteristics; Role of weather, earth, fertilizers, etc.................................................. 9 Diseases .................................................................................................................... 10 Size of US and world corn production ....................................................................... 11 Storage ability ........................................................................................................... 12 Demand........................................................................................................................ 12 The end products of corn industry & industrial use .................................................... 12 Other major uses than food .................................................................................... 12 Expected trends with changing technology ................................................................ 14 Everything about Bio ethanol ................................................................................. 15 Price of corn .............................................................................................................. 18 Seasonality ............................................................................................................ 18 Most important factors .......................................................................................... 18 World production ........................................................................................................ 18 Export Import ......................................................................................................... 19 Size of the US market; main trade partners ................................................................ 22 Important facts about the product and industry ....................................................... 26 Industry Overview................................................................................................... 26 APPENDIX ................................................................................................................ 277

CORN

Corn is an icon of American culture. Not only does it represent Native American traditions and serve as a symbol of both summertime BBQ fun and a night out at the movies, but corn, in the form of corn syrup, is also an added ingredient in many other foods that we consume in our daily diets. Corn is known scientifically as Zea mays. 1 This moniker reflect its traditional name, maize, by which it is known throughout many areas of the world.

History of corn Discovery of corn

From a scientific perspective, this important food plant that is native to America is thought to have originated in either Mexico or Central America. It has been a staple food in native civilizations since primitive times with some of the earliest traces of meal made from corn dating back about 7,000 years. Although corn is indigenous to the western hemisphere, its exact birthplace is far less certain. Archeological evidence of corn's early presence in the western hemisphere was identified from corn pollen grain considered to be 80,000 years old obtained from drill cores 200 feet below Mexico City. Another archeological study of the bat caves in New Mexico revealed corncobs that were 5,600 years old by radiocarbon determination. Most historians believe corn was domesticated in the Tehuacan Valley of Mexico. The original wild form has long been extinct. For western civilization, the story of corn began in 1492 when Columbus's men discovered this new grain in Cuba. An American native, it was exported to Europe rather than being imported, as were other major grains. Evidence suggests that cultivated corn arose through natural crossings, perhaps first with gamagrass to yield teosinte and then possibly with backcrossing of teosinte to primitive maize to produce modern races. There are numerous theories as to the ancestors of modern corn and many scientific articles and books have been written on the subject. Corn is perhaps the most completely domesticated of all field crops. Its perpetuation for centuries has depended wholly on the care of man. It could not have existed as a wild plant in its present form. From mythology perspective. the myths of different indigenous groups concur that corn was originally hidden under a mountain or an enormous rock and only the ants could
The term "maize" derives from the Spanish form of the indigenous Taino word maiz for the plant. This was the term used in the United Kingdom and Ireland, where it is now usually called "sweet corn", the most common form of the plant known to people there. Sweet corn is harvested earlier and eaten as a vegetable rather than a grain. "Maize". The Oxford English Dictionary, online edition. December 2007. Accessed December 16, 2007
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reach the grains to eat them. But after learning of the grain's existence from depending on the version foxes, rats, mountain cats, coyotes, crows, parrots, lice, magpies or other animals, man asked for the gods' help and, after various attempts, the gods were able to remove the precious food from under the ground and made it available to all mankind. In the Chilam Balam de Chumayel, a book of sacred stories, the author of this feat was Chaac, god of thunder and rain, and in all variations of the myth, the woodpecker appears to aide the gods, and ever since, the woodpecker's head has been red because of the wound he received from a fragment of rock. According to these legends, in the beginning, all corn was white, but a lightening bolt which one of the gods hurled upon the rock to break it burned, smoked or singed some of the grains. That is why there are now black, yellow and red varieties of the grain. In addition, the Popol Vuh tells us that from a mixture of white and yellow grains the current human race was formed. After the Conquest (16th century), the influence of the Catholic religion was felt in the ancient tales of the origins of corn, so there are even some accounts that along with beans, potatoes and other food plants, corn was dropped off the back of Christ during the crucifixion. The tremendous religious importance of corn has not been lost; the grain still forms an integral part of Maya ceremonies.

Importance as food
Because of its high protein and carbohydrate content, corn has been an important nutritional resource for thousands of years. It is eaten in soups and stews in addition to being consumed as a side dish. It is ground into meal which is then used to make bread and tortillas. It is consumed as cereal and eaten as a popped treat. When grits are served, you are eating this. Hominy is made from it as well as pancake syrup. It can be fried, creamed, boiled and baked. It has ears and can be eaten that way when grilled, boiled or baked. Our food ranking system qualified corn as a good source of many nutrients including thiamin (vitamin B1), pantothenic acid (vitamin B5), folate, dietary fiber, vitamin C, phosphorus and manganese

This chart graphically details the %DV that a serving of Corn provides for each of the nutrients of which it is a good, very good, or excellent source according to our Food Rating System.

So, corn is packed with nutrition, as follows. Carbohydrates 9 gm, Calcium 9 mg, Dietary fiber 2.7 gm, Fat 1.2 gm, Folate 46 mg, Iron 0.5 mg, Magnesium 37 mg, Niacin 1.7 mg, Phosphorus 120 mg, Potassium 270 mg, Protein 3.2 gm, Sugars 3.2 gm, Vitamin A 10 mg, Vitamin B 15 mg, Vitamin C 7 mg and Energy 90 kcal (360kJ).Even corn is so packed with nutrition,it can also cause allergy.2

Spreading in the world

Corn was the most important cultivated plant in ancient times in America. Early North American expeditions show that the corn-growing area extended from southern North Dakota and both sides of the lower St. Lawrence Valley southward to northern Argentina and Chile. It extended westward to the middle of Kansas and Nebraska, and an important lobe of the Mexican area extended northward to Arizona, New Mexico and southern Colorado. It was also an important crop in the high valleys of the Andes in South America. The great variability of the corn plant led to the selection of numerous widely adapted varieties which hardly resembled one another. The plant may have ranged from no more than a couple of feet tall to over 20 feet. It was not like the uniform sized plant that most people know today. For the Aztecs, Mayas, Incas and various Pueblo dwellers of the southwestern United States, corn growing took precedence over all other activities. The principal role of the corn plant during the 19th century was closely tied to the development of the Midwest. In the movement westward, corn found its major home in

Maize contains lipid transfer protein, an indigestible protein that survives cooking. This protein has been linked to a rare and understudied allergy to maize in humans.[45] The allergic reaction can cause skin rash, swelling or itching of mucous membranes, diarrhea, vomiting, asthma and, in severe cases, anaphylaxis. It is unclear how common this allergy is in the general population.

the woodland clearings and grasslands of Ohio, Indiana, Illinois, Iowa, and adjacent states. These were places where it had not been grown widely in prehistoric times. Like most early history, there is some uncertainty as to when corn first went to Europe. Some say it went back with Columbus to Spain, while others report that it was not returned to Spain until the second visit of Columbus. The word "corn" has many different meanings depending on what country you are in. Corn in the United States is also called maize or Indian corn. In some countries, corn means the leading crop grown in a certain district. Corn in England means wheat; in Scotland and Ireland, it refers to oats. Corn mentioned in the Bible probably refers to wheat or barley. When Christopher Columbus and other explorers came to the New World, they found corn growing throughout the Americas, from Chile to Canada. It was consumed both as a vegetable and as a grain in the form of cornmeal seasoned and eaten as an accompaniment to vegetables, fish or meat. The corn that was prized was not just limited to the yellow and white kernel varieties that we know, but many other more popular varieties that featured kernels of red, blue, pink and black and were not only solidly colored, but spotted or striped. At first, corn was only a garden curiosity in Europe, but it soon began to be recognized as a valuable food crop. Within a few years, it spread throughout France, Italy, and all of southeastern Europe and northern Africa. By 1575, it was making its way into western China, and had become important in the Philippines and the East Indies

Modern usage in other industries

In fact, there are more than 3.500 ways for using corn. Some industrial uses of corn include filler for plastics, packing materials, insulating materials, adhesives, chemicals, explosives, paint, paste, abrasives, dyes, insecticides, pharmaceuticals, organic acids, solvents, rayon, antifreeze, soaps, and many more. Corn also is used as the major study plant for many academic disciplines such as genetics, physiology, soil fertility and biochemistry. It is doubtful that any other plant has been studied as extensively as has the corn plant. Corn is used for so many different things that it can only be considered the miracle crop of the modern world. The amazing thing is that it is now being used as a renewable fuel source and even to make biodegradable plastic. Corn is by far the most versatile crop that is produced in the world. Its obvious use is food and food products such as cereal. Corn also is used in food products ranging from ice cream, yogurt and even as a binder in energy bars. Approximately 130,000 p=-metric tons of corn is exported annually to provide nourishment for the worlds starving population. When it comes to non-food products, its use is even more versatile and is used in countless different products. What is astonishing is that corn is also now being used as

the only ingredient that make the plastic containers that contain our food in supermarkets, the cups we use to drink from and even as a fiber that is soft enough to be used in clothing. Milled corn is even used as a binder in polymer sinks and even rat pellets.

The product information about CBOT Corn Futures contract

While the United States dominates world corn trade, exports only account for a relatively small portion of demand for U.S. corn, approximately 20%. This means that corn prices are largely determined by supply-and-demand relationships in the U.S. market, and the rest of the world must adjust to prevailing U.S. prices. This makes world corn trade and prices very dependent on weather in the U.S. Corn Belt. However, Argentina, the secondlargest corn exporter in most years, is in the Southern Hemisphere. Farmers there plant their corn after the size of the U.S. crop is known, providing a quick, market-oriented supply response to short U.S. crops. Who uses corn futures contracts? Feed industry companies Food industry companies Ethanol industry companies CME Group / Chicago Board of Trade (CBOT) In the United States, corn futures and options are traded and settled on the CME Group Exchange (on 12 July 2007, the CBOT merged with the CME under the CME Group holding company and ceased to exist as an independent entity). Trading for corn futures on the CME Group / Chicago Board of Trade (CBOT) is in both open auction and electronic trading. The purpose of the futures exchange is to allow market participants to "discover" what the price is for the product as it comes close to harvest time (futures price) and what the relationship is between a local cash market price (grain elevator) and the related CME Group futures price (basis; a "weak" basis indicates a negative spread between cash and futures prices). The symbol for the open auction corn futures contract is "C". The symbol for the electronic traded corn futures contract is "ZC". One must have access to an existing CME Group membership (for example, branch offices or affiliate offices of current members) or obtain a CME / CBOT membership, or establish a business relationship with a CME Group clearing member firm in order to trade on the exchange. Class B memberships in the CME Group / Chicago Board of Trade are sold on a bid / offer auction process. E-cbot is the electronic trading platform (LIFFE-CONNECT) for the CME Group / Chicago Board of Trade (CBOT). Connectivity to the system is also available through

Bloomberg, CQG, Inc., EasyScreen, eSpeed, FfastTrade, GL TRADE, NYFIX, Rolfe & Nolan, Townsend Analytics, Ltd., Trading Technologies, 7 Ticks, RTS Realtime Systems Group and Cunningham Trading System (CTS). Open auction trading hours for corn futures and options are Monday through Friday, from 9:30am to 1:15pm Central Time (CST / CDT). E-cbot electronic trading hours for corn futures are Sunday through Friday, from 6:30pm to 6:00am, and 9:30am to 1:15pm Central Time (CST / CDT). e-cbot electronic trading hours for corn options are 6:32pm to 6:00am Central Time (CST / CDT).

Corn production Types of corn

A type of grass, corn grows in warm soil, and has shallow roots. It is actually known as maize in many parts of the world, but called "corn" in most English-speaking countries, from the shortened original term of "Indian corn." Most kinds of corn grown in the United States are hybrids, or a blend of two different kinds of corn. Corn was domesticated first in middle America and then it spread as a crop throughout the rest of the Americas. Europeans who came to the Americas in the 15th century spread the grain to the rest of the world. It is currently the most planted crop in the United States, but it is also grown in Mexico, China, India and France. While there are many different types of corn, the two most common types of cornare sweet corn and field corn. Within these two main groups are many distinct and separate varieties. Each variety has its advantages and disadvantages. Some are meant for higher yield, others are bred for taste. Sweet corn is broken down into a number of different species, each belonging to one of four major subdivisions. Those subdivisions include - from less sweet to most sweet standard, sugar extender, supersweet and synergistic. Any of these types of corn are usually agreeable for human consumption. Within these subdivisions, the types of corn are broken down into white corn, yellow corn and bi-colored corn. Which varieties to plant are not just based on taste, but also on local conditions. Some hold up against the weather better in windier environments, for example. Still other choices may be made if the growing season is usually a short one. While there are many varieties of field corn, some of the most common include dent corn, flint corn, flour corn and waxy corn. These types of corn all have their own special features. For example, flint corn has a hard starch layer that protects the entire kernel. Dent corn will have dents in the crown of each kernel when it is fully ripe and beginning to dry. However, many species of corn, even sweet corn, can develop dents if it gets too dehydrated.

Crops and harvest

Corn crops around the world have their own unique production cycles of planting and harvest timeframes3. Below are the window of opportunities for planting and harvesting corn crops within each country. Grain prices tend to fluctuate the most during the growing seasons, as supply expectations can shift significantly due to planted acreage, weather and growing conditions. United States (39 percent of world production) Planting: Corn crops are planted beginning in April and last into June. Harvest: Corn is mainly harvested in October and is finished by the end of November. China (21 percent of world production) Planting: Corn is planted in mid-March through early June. Harvest: August through October. European Union (8 percent of world production) Planting: Mid-April through early June. Harvest: Mid-August through late October. Brazil (6 percent of world production) Planting: Early August through November. Harvest: February through May. Argentina (3 percent of world production) Planting: October through November. Harvest: March through May.

Characteristics; Role of weather, earth, fertilizers, etc

Corn prefers full sun and rich soil for the best growth. It likes hot weather and can handle dry conditions as long as they are not continual. While corn may be able to handle light scattered frosts, plan your planting time so that harvesting can take place before the cold season begins. Ideally, the soil pH should be 6.0 to 6.8. Your local cooperative extension office can test your soil for you, or you can buy pH test kits from hardware stores. Fertilizing corn is on the most essential and critical parts about growing corn. If you don't use the right type of fertilizer when you are growing corn, your corn won't grow right, it won't grow in as large of a quantity, and nor will it taste as good as it could of. When growing corn, you need to pick the right type of fertilizer. There are many corn fertilizers
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Worldwide production was 817 million tonnes in 2009more than rice (678 million tonnes) or wheat (682 million tonnes). Food and Agriculture Organization of the United Nations, Statistics Division (2009). "Maize, rice and wheat : area harvested, production quantity, yield

out there and the right fertilizer depends on a lot of factors, most important of which is soil type. Fertilizing corn should be done on the basis of soil tests and yield goals. Corn requires approximately 1.25 lbs. of elemental nitrogen (N), 0.6 lbs. of phosphate (P2O5) and 1.4 lbs. of potash (K2O) to produce one bushel of grain corn. Every type of soil is different and has a different chemical make up that requires different fertilizers. Nitrogen can be applied at anytime and soils with good nitrogen produces better crops. As mentioned before, the exact needs of your corn will depend on the type of corn you are growing. Nitrogen is very important to growing any type of crop. If you can't afford a special nitrogen right fertilizer, you can always try animal manure which contains a high level of nitrogen and other good chemicals that can help plants grow. Starter fertilizer can be applied with the planter in a band to the side and below the seed. The recommended fertilizer rate should be safely applied 2 inches to the side and 2 inches below the seed. Under cool, wet conditions, starter fertilizer offers many advantages. These type of fertilizer will help enable your corn to germinate and mature properly. Remember not to over fertilize your corn. More is not better. If you add to much, you run the risk of overfeeding and then kill your corn seeds and plants. It's sort of like over feeding people- eventually they get too fat and die. Corn is resilient but, like growing any crop, it needs the proper balance of soil nutrients in order to grow well. Ensure that you give your corn the right balance by getting the right kind of nutrients to it.

Diseases
There are several diseases that are common to corn plants, including various forms of leaf diseases, seed rot and corn smut. Leaf Diseas. There are many different kinds of leaf diseases in corn, including gray leaf spot, Stewart's bacterial disease and common corn rust. You can tell if your corn plants have leaf disease by looking at the bottom row of leaves. If you find brown or dead spots on the leaves, that is a definite indication of leaf disease. There is no cure for leaf disease, but it probably won't cause you much problem because it usually appears after the plant is pollinated and the ear of corn is growing. If you find leaf diseases early in your corn growing, there could be a problem with your soil or the seeds you purchased. Seed Rot Seed rot is a disease of the corn plant that occurs at the very beginning of the growth of a new corn plant. A seed or a seedling is susceptible to seed rot. One of the sure signs of this corn plant disease is a failure of your corn seeds to sprout. The cause of this might be fungus or bacteria in the soil. If there is a lot of rain after you plant, without proper sun

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and warmth, the seeds can rot and not sprout due to bacteria growing in the overly moist soil. If the problem is the weather, simply till the soil again and replant in dryer and sunnier weather. If it is a fungus problem, you might need to have your soil tested and then add a fungus treatment. Corn Smut 4 Corn smut is an issue especially in Midwestern states where storms, wind and hail can remove immature tassels from the ears of the corn. You can find corn smut on plants that you think are growing fairly well. You can identify corn smut by galls or boils growing on or near the ears of the corn; the galls are covered by a whitish membrane. Small galls usually will not wipe out your entire crop of corn, depending on the type of corn you have and the amount of corn you grow.

Size of US and world corn production

The United States produces approximately 50% of the world's corn, with production on several hundred thousand farms but concentrated in the upper Midwest states of Illinois, Iowa, Indiana, Missouri, Kansas, Nebraska, Ohio, Wisconsin, Minnesota, Michigan, and South Dakota (the state of Iowa produces the largest corn crop out of the major corn growing states). The U.S. Department of Agriculture (USDA) indicates that the United States had a record corn harvest in 2007 of 13.1 billion bushels harvested from a record 93.5 million acres planted (approximately 86.5 million acres harvested, with yield of approximately 151.1 bushels per acre). In 2008, approximately 85.9 million acres were planted, 78.6 million acres harvested for a yield of 12.1 billion bushels (approximately 153.9 bushels per acre). In the 2009, there was a record 164.9 bushels per acre harvested from 79.6 million acres (approximately 86.5 million acres planted) for a yield of 13.1 billion bushels (a national record). The USDA reported that as of March 1, 2010, corn reserves had hit 7.69 billion bushels, a 23-year high. In the United States, corn cultivation is a highly mechanized agricultural activity. The upgrade of agricultural equipment to GPS enabled tractors allows farmers to efficiently cover field acres on the first pass, and plow at night. Corn crop yields (measured in bushels per acre) have been steadily improving over the past 30 years due to improvements in seed varieties, fertilizers, pesticides, and machinery. It is estimated that approximately 80% of the corn grown in the United States is from genetically modified seed stock (GMO corn). Of that amount, most of the GMO corn is utilized for either animal feed or ethanol production, while the balance is utilized for corn syrup / corn starch production. Some GMO corn is utilized in yellow corn tortilla (snack) chips.
In Mexico, corn smut is known as huitlacoche ([wit akot e], sometimes spelled cuitlacoche). This word entered Spanish in Mexico from classical Nahuatl, though there is debate as to which Nahuatl words huitlacoche derived from. In modern Nahuatl, the word for huitlacoche is cuitlacochin, and some sources deem "cuitlacochi" to be the classical form. Guido Gmez de Silva, "Diccionario breve de mexicanismos", Fondo de Cultura Econmica, Mexico 2001. Entries for "huitlacoche" and "cuicacoche o cuiltacoche
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Corn production in any given year is determined by two factors: acreage and yield. Corn is usually grown in the same areas as, and often competes for acreage with, soybeans. For this reason, the expected profitability of corn relative to other crops is often a major consideration in a farmer's planting decision. After corn has been planted and acreage has been established, the market focus generally shifts to the weather and other yield influencing factors until the crop has been harvested. Other major national producers include Australia, Argentina, Brazil, Canada, China, Ukraine, and the European Community. Corn is by far the largest component of global coarse-grain trade, accounting for about three-quarters of total volume in recent years (coarse grains make up a common trade category that includes corn, sorghum, barley, oats, and rye).

Storage ability
The best way to protect dry stored corn from spoilage by mold and insect activity is to apply integrated pest management practices, which are based on an understanding of the ecology of grain pests. The application of a broad range of preventive practices has a cumulative effect on pest control. Examples include cleaning grain bins and the area surrounding them prior to harvest, controlling grain moisture throughout drying, cleaning dried corn prior to storage to remove broken kernels and trash, controlling temperature throughout storage, managing the depth of grain in the bin to permit uniform airflow,and monitoring grain during storage for temperature, moisture, and mold and insect populations.

Demand The end products of corn industry & industrial use

Most people associate the word corn with food, livestock feed, and ethanol. However, certain institutions are striving to expand that association by funding research for the development of new uses and communicating these uses for corn crops to consumers. Corn-based products such as plastics, packing materials, household cleaning agents, fibers and fabrics have been making their debut on the shelves of stores.

Other major uses than food

Corn-Based Products Cornstarch, ethanol and corn syrup are just a few of the ingredients that come from field corn and can be used or made into other corn- based products. For example, biodegradable cornstarch packing peanuts are made from corn and completely dissolve when they come in contact with water. Different variations of alcohol, or ethanol can be found as a main ingredient in many household cleaners, hand sanitizers and medicines. 12

Corn syrup is a sweetener that is prevalent in soft drinks, candy and other food items. The development of several new, exciting products made from corn is envisaged. Also Salt, a sodium-free salt substitute made from corn, was developed through sponsored research. Research funding has also led to the development of Magic Nuudles, water soluble packaging peanuts, which are used as building blocks for children to play with. These toys provide hours of enjoyment with their lick and stick capabilities. When the projects are complete, parents can just wash the peanuts down the sink, for an easy cleanup. With all these new uses and products, it is important to create consumer awareness about new corn-based items. This has become easier as the price of petroleum has risen and made the items more affordable. One of the most exciting new opportunities for corn are corn-based polymers. Cornbased polymers are clear, biodegradable-chemical compounds that look like miniature marbles and can be used to create corn-based plastics, fibers and other products. They are made from a 100 percent annually-renewable resource, field corn, the most common variety of corn. It is grown mainly as livestock feed. This is not popcorn or sweet corn, which is grown for human consumption. Producing Corn-Based Polymers Produced Each company has a slightly different process in which they create their individual corn-based polymer. The following is a general overview of the procedure. Corn is cooked and coarsely ground, extracting the glucose, or starchiest part, from the kernel. The glucose is then mixed with a combination of organisms, water, vitamins and minerals and put through a fermentation process. Fermentation creates monomers. The monomers are then shipped to a polymer plant where they are polymerized. The polymer comes out in long strands that are chopped into pellets. Polymer pellets can be sent to a textile mill where they are spun into fibers which are used in fabrics for clothing or carpets, or they can be processed into plastics. Through the entire process, there is little waste. Each part of the corn kernel goes toward the creation of another product. After polymer production which uses the glucose, the germ from the kernel is the remaining portion of corn. The germ contains the oil used to make corn oil, corn gluten meal and corn gluten feed for livestock. The amount of corn needed to produce corn-based polymers depends on the starch content of the corn. According to the National Corn Growers Association (NCGA), one bushel of corn (56 lb.) provides 22.4 lb. of fiber or polymer. Superiority of Plastics and Fibers Made From Corn-Based Polymers Corn-based fibers are renewable and environmentally-friendly because they are made from corn instead of petroleum. These corn-based fabrics are literally grown and sewn in America. The annually-renewable, natural source for fabrics means not having to draw upon depleting fossil fuels. Corn-based polymers have been referred to as greenhouse gas- neutral polymers. According to NatureWorks, the production of their PLA uses up to 50 percent less petroleum than required by conventional plastic resins, from corn fields to 13

the retail counter. The production of NatureWorks PLA also contributes 40 percent less greenhouse gases to the atmosphere than traditional plastic materials. Another benefit of corn- based polymers is the fact that they are compostable, which means they can be simply thrown away with food waste or transported to an appropriate commercial compost facility. Importance of Corn-Based Products With environmental issues drawing much attention these days, corn-based products are more desirable to consumers. These products have many benefits, including: y Biodegradable or compostable y Competitively priced y Environmentally-friendly y Equivalent function or better y Helps lessen U.S. dependence on foreign oil y Made from a 100 percent renewable resource The production of corn-based products opens up a new market for corn. There are endless opportunities to replace petroleum-based plastics and move toward the environmentallyfriendly, corn-based plastics. Benefits of Carbon The polymers used to make corn-based products come from an annually renewable resource, corn. Using corn to make products creates a closed-loop carbon cycle. The figure above illustrates the complete cycle that corn goes through as it is produced into corn-based products and then returned to the earth. Carbon dioxide is removed from the atmosphere and absorbed by the corn plant as the plant grows. Once corn is made into a corn-based product, has served its purpose, and is properly disposed of, the carbon is returned to the soil as the product degrades without polluting the environment while also reducing greenhouse gas emissions. Corn-based polymers are fully compostable in municipal and industrial facilities, they are also compatible with all standard waste and recycling management practices.

Expected trends with changing technology

GreenShift Corporation (OTC Bulletin Board: GERS) develops and commercializes clean technologies designed to address the financial and environmental needs of its clients by decreasing raw material needs, facilitating co-product reuse, and reducing the generation of wastes and emissions. GreenShifts mission is to build shareholder value by using its technologies to catalyze disruptive environmental gain. GreenShift believes that the first, best and most costeffective way to achieve this is to develop technology-driven economic incentives that motivate large populations of people and companies to make incremental environmental contributions that are collectively very significant. GreenShifts patented corn oil extraction technologies enable GreenShift and its licensees to drill into the backend of first generation corn ethanol plants to tap into an existing reserve of inedible crude corn oil that has been historically trapped in the

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distillers grain co-product of ethanol production. This corn oil is a valuable second generation feedstock for use in the production of advanced carbon-neutral liquid fuels, such as biodiesel, biojet fuel, and renewable diesel, thereby enhancing total fuel production from corn, increasing ethanol plant profits, and reducing lifecycle greenhouse gas (GHG) emissions. Key Highlights of EPAs Regulatory Impact Analysis y Reduced Carbon According to the EPAs analysis, use of corn oil extraction is expected to reduce lifecycle GHG emissions of corn ethanol by about 18%, or by about 4.5 million tons per year of carbon industry-wide at the EPAs estimated 70% penetration rate, the highest reduction of any of the advanced technologies cited by the EPA. Reduced Energy Since corn oil is an insulator, removing it improves the heating efficiency and reduces the energy demand of corn ethanol. The EPA projected reductions in thermal energy use of 5.4% due to use of corn oil extraction technology. While GreenShift believes the energy savings are substantially greater, the EPAs estimate corresponds to industry-wide savings of about $160 million per year at current market prices at the 70% penetration rate projected by the EPA. Increased Profitability Use of corn oil extraction increases co-product revenues in addition to reducing production costs. The EPA estimated that ethanol producers using backend corn oil extraction technology can increase their profit by about $0.079 per gallon of ethanol produced. Compliance with RFS2 The EPA concluded that based on our final rulemaking analysis we have found that corn ethanol, including advanced technologies such as corn oil extraction/fractionation, reduces GHG emissions by more than the 20% threshold required for renewable fuels. Vital New Biofuel Feedstock The EPA estimated corn oil will be a significant contributor to the biodiesel volume required by the RFS2 rule, projecting that low-grade corn oil extracted from dry mill ethanol production will be used in 2022 to supply feedstock for 40% of the total annual U.S. output of biodiesel. This equates to 680,000,000 gallons or about 5.2 billion pounds per year of inedible corn oil feedstock with a current market price of about $0.25 per pound.

Everything about Bio ethanol

Ethanol fuel is ethanol (ethyl alcohol), the same type of alcohol found in alcoholic beverages. It is most often used as a motor fuel, mainly as a biofuel additive for gasoline. World ethanol production for transport fuel tripled between 2000 and 2007 from 17 billion to more than 52 billion litres. From 2007 to 2008, the share of ethanol in global gasoline type fuel use increased from 3.7% to 5.4%. In 2010 worldwide ethanol fuel production reached 22.95 billion U.S. liquid gallons(bg) (86.9 billion liters), with the United States as the top producer with 13.2 bg, accounting for 57.5 percent of global production.

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Ethanol fuel is widely used in Brazil and in the United States, and together both countries were responsible for 88 percent of the world's ethanol fuel production in 2010. Most cars on the road today in the U.S. can run on blends of up to 10% ethanol, and the use of 10% ethanol gasoline is mandated in some U.S. states and cities. Since 1976 the Brazilian government has made it mandatory to blend ethanol with gasoline, and since 2007 the legal blend is around 25% ethanol and 75% gasoline (E25). In addition, by December 2010 Brazil had a fleet of 12 million flex-fuel automobiles and light trucks and over 500 thousand flex-fuel motorcycles regularly using neat ethanol fuel (known as E100). Bioethanol is a form of renewable energy that can be produced from agricultural feedstocks. It can be made from very common crops such as sugar cane, potato, manioc and corn. However, there has been considerable debate about how useful bioethanol will be in replacing gasoline. Concerns about its production and use relate to increased food prices due to the large amount of arable land required for crops, as well as the energy and pollution balance of the whole cycle of ethanol production, especially from corn. Recent developments with cellulosic ethanol production and commercialization may allay some of these concerns. Ethanol is a renewable energy source because the energy is generated by using a resource, sunlight, which cannot be depleted. Creation of ethanol starts with photosynthesis causing a feedstock, such as sugar cane or corn, to grow. These feedstocks are processed into ethanol. About 5% of the ethanol produced in the world in 2003 was actually a petroleum product. It is made by the catalytic hydration of ethylene with sulfuric acid as the catalyst. It can also be obtained via ethylene or acetylene, from calcium carbide, coal, oil gas, and other sources. Two million tons of petroleum-derived ethanol are produced annually. The principal suppliers are plants in the United States, Europe, and South Africa. Petroleum derived ethanol (synthetic ethanol) is chemically identical to bioethanol and can be differentiated only by radiocarbon dating. Bio-ethanol is usually obtained from the conversion of carbon based feedstock. Agricultural feedstocks are considered renewable because they get energy from the sun using photosynthesis, provided that all minerals required for growth (such as nitrogen and phosphorus) are returned to the land. Ethanol can be produced from a variety of feedstocks such as sugar cane, bagasse, miscanthus, sugar beet, sorghum, grain sorghum, switchgrass, barley, hemp, kenaf, potatoes, sweet potatoes, cassava, sunflower, fruit, molasses, corn, stover, grain, wheat, straw, cotton, other biomass, as well as many types of cellulose waste and harvestings, whichever has the best well-to-wheel assessment. An alternative process to produce bio-ethanol from algae is being developed by the company Algenol. Rather than grow algae and then harvest and ferment it the algae grow in sunlight and produce ethanol directly which is removed without killing the algae. It is claimed the process can produce 6000 gallons per acre per year compared with 400 gallons for corn production.

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Currently, the first generation processes for the production of ethanol from corn use only a small part of the corn plant: the corn kernels are taken from the corn plant and only the starch, which represents about 50% of the dry kernel mass, is transformed into ethanol. Two types of second generation processes are under development. The first type uses enzymes and yeast fermentation to convert the plant cellulose into ethanol while the second type uses pyrolysis to convert the whole plant to either a liquid bio-oil or a syngas. Second generation processes can also be used with plants such as grasses, wood or agricultural waste material such as straw. Production process The basic steps for large scale production of ethanol are: microbial (yeast) fermentation of sugars, distillation, dehydration, and denaturing (optional). Prior to fermentation, some crops require saccharification or hydrolysis of carbohydrates such as cellulose and starch into sugars. Saccharification of cellulose is called cellulolysis. Enzymes are used to convert starch into sugar. Fermentation

Ethanol is produced by microbial fermentation of the sugar. Microbial fermentation will currently only work directly with sugars. Two major components of plants, starch and cellulose, are both made up of sugars, and can in principle be converted to sugars for fermentation. Currently, only the sugar (e.g. sugar cane) and starch (e.g. corn) portions can be economically converted. However, there is much activity in the area of cellulosic ethanol, where the cellulose part of a plant is broken down to sugars and subsequently converted to ethanol. Distillation

Ethanol plant in Sertozinho, Brazil. For the ethanol to be usable as a fuel, water must be removed. Most of the water is removed by distillation, but the purity is limited to 9596% due to the formation of a low-boiling water-ethanol azeotrope. The 95.6% m/m (96.5% v/v) ethanol, 4.4% m/m (3.5% v/v) water mixture may be used as a fuel alone, but unlike anhydrous ethanol, is immiscible in gasoline, so the water fraction is typically removed in further treatment in order to burn in combination with gasoline in gasoline engines. Dehydration

There are basically five dehydration processes to remove the water from an azeotropic ethanol/water mixture. The first process, used in many early fuel ethanol plants, is called azeotropic distillation and consists of adding benzene or cyclohexane to the mixture. When these components are added to the mixture, it forms a heterogeneous azeotropic mixture in vapor-liquid-liquid equilibrium, which when distilled produces anhydrous ethanol in the column bottom, and a vapor mixture of water and cyclohexane/benzene. When condensed, this becomes a two-phase liquid mixture. Another early method, called extractive distillation, consists of adding a ternary component which will increase ethanol's relative volatility. When the ternary mixture is distilled, it will produce anhydrous ethanol on the top stream of the column. 17

With increasing attention being paid to saving energy, many methods have been proposed that avoid distillation altogether for dehydration. Of these methods, a third method has emerged and has been adopted by the majority of modern ethanol plants. This new process uses molecular sieves to remove water from fuel ethanol. In this process, ethanol vapor under pressure passes through a bed of molecular sieve beads. The bead's pores are sized to allow absorption of water while excluding ethanol. After a period of time, the bed is regenerated under vacuum or in the flow of inert atmosphere (e.g. N2) to remove the absorbed water. Two beds are often used so that one is available to absorb water while the other is being regenerated. This dehydration technology can account for energy saving of 3,000 btus/gallon (840 kJ/l) compared to earlier azeotropic distillation.

Price of corn
Seasonality
Seasonality can be split into three recurring periods: the first one starting late spring to midsummer, second one covering mid-summer to harvest time and the third relating to the period after the crop has been harvested. The most striking characteristic here is a trend for corn to see a decline of prices from mid-summer going into the harvest period. Usually prices tend to be near their highest in July due to factors relating to the old crop and ambiguity over the new crop harvest. Even in some years when the price decline starts earlier, it tends to continue after the mid-July period if the crop harvest forecast is good. Harvest increases current supply which puts downward pressure on prices reaching their lowest levels of the crop year. Prices will then recover after the harvest although the 'February Break' may mean that corn prices display some weakness in February.

Most important factors

Corn commodity prices can be affected by a wide range of factors, but the two most important determiners of the price of corn options are the weather, as with any agricultural product, and the worldwide trend in energy prices, as a result of corn being used in the production of ethanol. Any overly wet or dry season will limit the yield of the crop that a farmer can harvest, whereas exemplary weather will make yields much larger, decreasing corn's price. When trading in corn futures contracts, speculators also need to be aware of the viability of alternative biofuels, as although corn based ethanol is currently the cheapest biofuel, the advent of a cheaper alternative will usurp ethanol as the fuel of choice, and the demand for corn will subsequently decrease.

World production

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Export Import

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Country Exports Canada 248.8 China 91.9 Mexico 163.3 Japan 60.5 Germany 48.2 United Kingdom 48.5 South Korea 38.8 France 27.0 Taiwan 26.0 Brazil 35.4 Netherlands 35.0 India 19.2 Singapore 29.1 Venezuela 10.7 Saudi Arabia 11.6

Imports 276.5 364.9 229.7 120.3 82.7 49.8 48.9 38.6 35.9 29.3 19.0 29.5 17.5 32.8 31.4

Total Trade 525.3 456.8 393.0 180.9 130.9 98.3 87.7 65.6 61.9 59.3 54.0 48.8 46.6 43.4 43.0

Size of the US market; main trade partners

Field corn (or dent corn) is the predominant corn type grown in the U.S., and it is primarily used for animal feed. Currently, less than 10% of the U.S. field corn crop is used for direct domestic human consumption in corn-based foods such as corn meal, corn starch, and corn flakes, while the remainder is used for animal feed, exports, ethanol production, seed, and industrial uses. Sweet corn, both white and yellow, is usually consumed as immature whole-kernel corn by humans and also as an ingredient in other corn-based foods, but makes up only about 1% of total U.S. corn production. Overall in 2007 / 2008, approximately 55% of the corn produced in the United States was fed directly to animals (poultry, beef, pork and dairy livestock), in either the form of whole grain or in commercially prepared feeds where corn is a primary ingredient. Ethanol fuel / fuel additive accounts for appoximately 16% of production. Food, seed, and industrial products account for an additional 12% of production. The rest, approximately 17%, is exported (most corn sold to other countries is also used to feed livestock, food or ethanol production). Japan is consistently one of the largest customers for U.S. corn. In contrast, the republics of the Commonwealth of Independent States (formerly the USSR) are noted for making huge but irregular purchases. Other large buyers include South Korea, Taiwan, Mexico, and Egypt. Corn production in any given year is determined by two factors: acreage and yield. Corn is usually grown in the same areas as, and often competes for acreage with, soybeans. For this reason, the expected profitability of corn relative to other crops is often a major 22

consideration in a farmer's planting decision. After corn has been planted and acreage has been established, the market focus generally shifts to the weather and other yield influencing factors until the crop has been harvested. Since the majority of each year's corn crop is fed to animals, livestock and poultry numbers are important factors in determining domestic corn demand. Competition from substitute feed grains like barley, oats, rye, and milo (grain sorghum); tropical crops such as cassava (tapioca); and even various food grains including wheat, can affect corn demand, both here and abroad. Foreign demand also may be influenced by such things as exchange rates and grain production in other countries. All other things being equal, an increase in supply can cause prices to fall, as often occurs when farmers produce a bumper crop. On the other hand, a crop failure or other decrease in supply can cause prices to rise. An increase in demand can cause prices to rise, all other things being equal, such as when a shortage of other feed grains leads to greater use of corn. Conversely, prices can fall from a decrease in demand, as when large foreign crops reduce the need for other countries to buy U.S. corn. Corn prices can be volatile, so farmers, elevator operators, processors, exporters, and others need a way to manage this risk. The Chicago Board of Trade and the Euronext.liffe Commodity Exchange each offer two types of risk-management tools: futures contracts and options on futures contracts.5

Contract Months December, March, May, July, September Daily Price Limit 20 cents per bushel ($1,000/contract) above or below the previous day's settlement price. No limit in the spot month (limits are lifted two business days before the spot month begins). Ticker Symbols Open Outcry: C Electronic (a/c/e): ZC Tick Size One fourth cent per bushel ($12.50/contract)

On May 11, 2011, the USDA World Agricultural Supply and Demand Estimates (WASDE) indicated: Corn production for 2011/12 is projected at a record 13.5 billion bushels, up 1.1 billion from 2010/11 as a 4.0-million-acre increase in intended plantings and a recovery from last years weather-reduced yields boost expected output. The 2011/12 corn yield is projected at 158.7 bushels per acre, 3.0 bushels below the 1990-2010 trend reflecting the slow pace of planting progress through early May. The 2011/12 yield is expected to be the third highest on record. Corn supplies for 2011/12 are projected at 14.3 billion bushels. This is below the 2009/10 record of 14.8 billion bushels, but up 75 million from 2010/11, as a 5-million-bushel increase in 2010/11 imports and a 50-million-bushel reduction in 2010/11 exports boost current year carryout this month. Source: USDA World Agricultural Supply and Demand Estimates (WASDE)

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Corn Futures Contract Size 5,000 bushel Deliverable Grades Number 2 Yellow at par, Number 1 yellow at 1 1/2 cents per bushel over contract price, Number 3 yellow at 1 1/2 cents per bushel under contract price Price Quote Cents and quarter-cents per bushel Last Trading Day The business day prior to the 15th calendar day of the contract month. Last Delivery Day 2nd business day following the last trading day of the delivery month.

Trading Hours Open Outcry: 9:30 a.m. - 1:15 p.m. Chicago time, Mon-Fri. Electronic (a/c/e): 8:30 p.m. 6:00 a.m. Chicago time, Sun.-Fri. Trading in expiring contracts closes at noon on the last trading day.

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Important facts about the product and industry

Facts Corn, Zea mays L., (or maize at it is known throughout much of the world) is a cereal crop, a member of the grass family. Corn is grown around the world and is one of the globe's most widely used food staples; corn varieties are directly used for food and animal feed or processed to make food and feed ingredients (such as high fructose corn syrup, corn starch and lysine) or industrial products such as ethanol and polylactic acid (PLA). The two primary methods of processing corn are referred to as "dry" and "wet" milling. Industry Overview In 2005, the U.S. produced 42 percent of the worlds corn. Over 50 percent of the U.S. crop is produced in Iowa, Minnesota, Nebraska or Illinois. Other states in which corn is grown include Kentucky, Ohio, Indiana, Wisconsin, South Dakota, Wisconsin and Missouri. In 2005, over 58 percent of the U.S. corn crop was used for feed. The remaining U.S. crop was split between exports (25 percent) and food, seed or industrial uses such as ethanol production (17 percent). Other major corn producing countries include China, Brazil, Mexico and the 25 countries that make up the European Union. Fun Facts About Corn Farmers grow corn on every continent except Antarctica. One bushel of corn will sweeten more than 400 cans of Coca-Cola. There are about 800 kernels in 16 rows on each ear of corn. The corncob (ear) is actually part of the corn plants flower. The main ingredient in most dry pet food is corn. Corn is America's number one field crop. Corn leads all other crops in value and volume of production. A pound of corn consists of approximately 1,300 kernels. Corn is used to produce fuel alcohol. Fuel alcohol makes gasoline burn cleaner, reducing air pollution, and it doesn't pollute the water.

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APPENDIX

1). Corn: The Miracle Crop of the Modern World, Published by Bren Parks November 20, 2007, http://scienceray.com/biology/ecology/corn-the-miracle-crop-of-themodern-world/ 2).Corn and the Maya, http://www.mayadiscovery.com/ing/history/corn.htm 3). Corn Commodity Market, http://www.credfinrisk.com/corn.html 4). Corn Oil Extraction Technology Leads Energy and Carbon Shift for Ethanol Industry, http://www.businesswire.com/news/home/20100208006406/en/Corn-Oil-ExtractionTechnology-Leads-Energy-Carbon 5).Corn Food, http://www.corn.com/corn-food/ 6).Corn, http://www.whfoods.com/genpage.php?tname=foodspice&dbid=90 7). Origin, History, and Uses of Corn, http://www.agron.iastate.edu/courses/agron212/readings/corn_history.htm 8) Maize, http://en.wikipedia.org/wiki/Maize

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