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Until 1850, corn starch was used primarily for starching laundry and industrial uses.
Corn starch is used as a thickening agent in soups and liquid-based foods, such as sauces, gravies and custards by mixing it with a cold liquid to form a paste or slurry. It is sometimes preferred over flour because it forms a translucent mixture, rather than an opaque one. As the starch is heated, the molecular chains unravel, allowing them to collide with other starch chains to form a mesh, thickening the liquid (Starch gelatinization).
It is usually included as an anticaking agent in powdered sugar (10X or confectioner's sugar). For this reason, recipes calling for powdered sugar often call for at least light cooking to remove the raw corn starch taste. Baby powder often uses cornstarch.
The corn is steeped for 30 to 48 hours, which ferments it slightly. The germ is separated from the endosperm and those two components are ground separately (still soaked). Next the starch is removed from each by washing. The starch is separated from the corn steep liquor, the cereal germ, the fibers and the corn gluten mostly in hydrocyclones and centrifuges, and then dried. (The residue from every stage is used in animal feed and to make corn oil or other applications.) This process is called wet milling. Finally, the starch may be modified for specific purposes.