Corn is one of the most actively traded commodities by volume globally within the grain and oilseed space. Although Corn futures at CME Group are delivered in the United States, corn as the underlying is produced globally, with South American production rapidly growing especially in Brazil. This has the potential to leave corn exporters exposed to the change in both corn prices and foreign exchange rates.

Consider a Brazilian corn exporter who receives an order in July for 4,000 metric tons of corn, to be exported in two month's time.The agreed upon price is the current September Corn futures price, minus 10 cents per bushel, and the exporter will receive USD which they then must exchange for BRL. 

The time between when the order was received and when delivery is required creates a two month gap where the producer is exposed to the risk of the movement of the corn price, as well as risk of the movement of the BRL to USD exchange rate. To mitigate this risk, the exporter decides to sell September Corn futures contracts and buy September Brazilian Real futures contracts.

To determine how many Corn futures contracts they need to sell, they take the order of 4,000 metric tons of corn and convert it to bushels to get 157,471.6 bushels. They then divide the number of bushels by the contract size of 5,000 bushels to get 32 September Corn futures contracts.

The September Corn futures contract is 492 U.S. cents per bushel. Since the agreed price is the current September futures price minus 10 cents, they will receive 482 U.S. cents per bushel for a total of $759,013.11 USD in September.

To determine how many Brazilian Real futures contracts they need to buy, they take the U.S. estimated value of the sale and convert it to Brazilian real using the current Brazilian Real futures September settlement price of $0.20200 per Brazilian real, or R$4.950495 per U.S. dollar. This comes out to R$3,757,490.65 Brazilian real.

They then divide this by the contract size of 100,000 BRL. They decide to buy 38 CME Group Brazilian Real futures contracts (3,757,490.65/100,000) expiring in September to hedge the FX component of their risk.

Say the price of corn remains stable but the Brazilian real strengthens, and the September Brazilian Real futures settlement price increases from $0.20200 to $0.21095 per BRL, which indicates a change of the BRL from R$4.950495 per U.S. dollar to R$4.74046 per U.S. dollar.

The exporter will still receive $759,013.11 U.S. dollars in September, but that will now be worth fewer BRLs than before due to the change in the exchange rate.

However, since the exporter bought 38 BRL futures at a price of $0.202, selling the futures at $0.21095 in September results in a small net gain of R$1,803.55. Had the Brazilian real weakened instead, the opposite would happen, with a gain in the cash market being offset by a loss in the futures market, hedging the overall position.

Corn and FX futures can be used by market participants looking to mitigate risks associated with market volatility.