Agriculture

Agricultural products

Agricultural products encompass a diverse range of items, varying from one country to another. Examples include Cotton, Wheat, Sugar, Corn, Rice, and Spices. PMEX provides products across four primary asset classes: metals, agriculture, energy, and financial futures. Each commodity features a selection of contracts based on currency denomination, contract size, and duration.

PMEX presents a broad array of products aligned with those Pakistan produces, exports, and imports, as well as offerings listed on major international exchanges worldwide. Following a thorough assessment, the Exchange has curated a selection of products, incorporating both local and physically deliverable futures, along with international and cash-settled futures.

Nurturing Growth Through Innovation and Tradition

In the embrace of fertile soils, a young plant unfurls its leaves, symbolizing the dawn of growth and the promise of harvest. This image captures the essence of modern agriculture—a blend of innovation and time-honored practices that cultivates not just crops, but a sustainable future.

Wheat

Wheat played a pivotal role in the social and cultural development of humanity, marking the initiation of large-scale cultivation and long-term storage. This significant shift allowed the establishment of city-based societies and laid the foundation for civilization.

Originating as a wild grass in southwestern Asia, archaeological evidence suggests that wheat cultivation began in the Nile Valley around 5,000 BC. While not native to the U.S., wheat was first grown on the Massachusetts coast in 1602.

In commodity trading, wheat must be categorized into specific classes based on grain properties defined by exchange contracts. One such class is Soft Red Winter Wheat, named for its cultivation during U.S. winter months. Typically grown in humid environments like the South, Great Lakes region, and the Atlantic coast, the planting season ranges from mid-August to the end of October, with harvesting occurring in late May. Soft Red Winter Wheat is a crucial ingredient for various food products, including bread, pasta, and crackers, as well as industrial starches and adhesives.

Chicago Wheat futures offer an effective means to manage global price risks associated with wheat trading for merchandisers, producers, food processors, livestock operations, importers, and others. These futures contracts provide opportunities to identify cyclical price and volatility patterns in both short and long-term scenarios.

Traders in Chicago Wheat futures can also capitalize on arbitrage and spread opportunities with other commodities, including related grains, oilseeds, and livestock. Each Chicago Wheat futures contract represents 5,000 bushels or approximately 136 metric tons.

Corn

Corn, belonging to the grass family, is a native grain of the Americas, with fossils of its pollen dating back over 80,000 years discovered in lake sediment beneath Mexico City.

Archaeological findings reveal that cultivated Corn existed in the southwestern U.S. for at least 3,000 years, indicating its significance as a food crop among indigenous people well before the arrival of Europeans.

As a resilient plant, Corn thrives in various regions worldwide, adapting to altitudes ranging from sea level to 12,000 feet in the South American Andes Mountains. It can flourish in tropical climates with high rainfall of up to 400 inches per year, as well as in arid regions receiving only 12 inches per year. The U.S. stands out as a major Corn producer, yielding a staggering 333 million tonnes, nearly three times more than the second-leading country, China. Efficient large-scale Corn harvesting in North America emerged after World War II, replacing labor-intensive methods.

Despite substantial domestic consumption in applications such as fodder and ethanol production, the U.S. Department of Agriculture estimates that the country still exports around 1,859 million bushels of Corn to other nations.

Corn finds primary use as livestock feed globally, with additional applications including alcohol additives for gasoline, adhesives, cooking oil, margarine, sweeteners, and human consumption. A single Corn futures contract represents 5,000 bushels or approximately 127 metric tons.

Cotton

Cotton, a natural plant fiber, originates from small trees and shrubs within the mallow family, with the American Upland cotton plant being a common source.

Utilized in India for over 5,000 years, Cotton has historical applications among ancient Chinese, Egyptians, and North and South Americans. European settlers in the U.S. cultivated Cotton as one of their earliest crops.

Thriving in regions with a long growing season, abundant sunshine, and water during growth, Cotton necessitates dry weather for harvesting. The U.S. Cotton Belt extends from northern Florida to North Carolina and westward to California.

Planting time in the U.S. varies from early February in Southern Texas to early June in the northern Cotton Belt. The plant's flower bud evolves into an oval boil that opens upon maturity. Mechanical harvesting, involving spindle-type pickers or strippers, is employed for approximately 95% of U.S. Cotton, followed by processing at cotton gins for drying, cleaning, separation, and baling.

Cotton finds diverse applications in products ranging from clothing and home furnishings to medical items. Its value is assessed based on staple (fiber length), grade (color, brightness, and foreign matter), and character (fiber diameter, strength, body, maturity, uniformity, and smoothness). Cotton stands as the fifth-leading cash crop in the U.S. and a significant agricultural export, with weight measured in pounds and price quoted in cents and hundredths of a cent per pound. A "bale" is conventionally deemed to equal 480 pounds.

Soybeans

Soybeans rank among the most popular oilseed products globally, finding applications in manufacturing plastics, solvents, and various industrial items. They serve as livestock feed, edible oil, and other food products. In the U.S., Soybeans weren't utilized as a food product until post the 1920s, although they held essential status in Asian cultures for centuries before Western cultivation commenced.

The world's top three producers, in order, are the U.S., Brazil, and Argentina. In the U.S., Soybeans are planted from May to mid-July, flowering between July and late August, with harvesting from the end of September to late November. In Brazil, planting occurs from September to mid-December, flowering from January to early March, and harvesting from the end of March to late June. Soybean futures offer a means to efficiently manage the price risk associated with Soybean transactions for merchandisers, producers, food processors, livestock operations, importers, and others.

Futures contracts present opportunities to recognize short and long-term cyclical price and volatility patterns. Soybean futures traders can leverage arbitrage and spread opportunities with other commodities, encompassing related grains, oilseeds, and livestock.