How to Invest in Corn
An investment in corn can take many forms. For example, one can buy stock in a domestic food company, an ethanol producer that uses corn, farm-equipment companies, the commodities and derivatives markets, or an exchange-traded fund with a corn focus. Each of these options brings its own risks and rewards, so careful consideration is necessary before making an investment.
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Instructions
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Research stocks that relate to American corn consumption. One of the most direct fits as a corn stock is probably Archer Daniels Midland (ADM), which is traded on the New York Stock Exchange. In addition, there are many food stocks for which corn is a major ingredient, including Tyson Foods and Kellogg's.
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Research corn as a biofuel. The United States relies on corn as a source of ethanol. Consequently, large American petroleum companies serve as an indirect way to invest in corn. For example, Chevron is a large retailer and producer of ethanol.
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Research investments in corn commodities and futures. Corn is sold in the commodities markets in the same way that it has been for centuries. An investor can buy and sell corn in markets through options, futures and other forms of commonly traded contracts.
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Research corn exchange-traded funds. There is a handful ETFs related to the corn industry offering a variety of ways to invest. Several of these ETFs are available on foreign markets, especially the London Stock Exchange.
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Research farm equipment manufacturers. Corn is a capital-intensive product, requiring large-scale farm equipment for cultivation and harvesting. Consequently, sales of farm implements increase with increases in the price of corn. Companies such as Deere and Caterpillar offer an indirect way to invest in the corn industry through heavy equipment.
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Tips & Warnings
Like any investment, corn-related investments should be made only after considerable research and after determining how the investment fits into your overall portfolio.
