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There are records of traders hedging commodities as early as 17th century Holland and Japan (Tulips and Rice). It was in 1848 that the Chicago Board of Trade was founded. Centrally located for United States agriculture the commodities exchange became the most important in the world for hedging commodities. The necessity for trading commodity futures comes from the uncertainties of crop and livestock production. A drought with a subsequent bad harvest or loss of livestock can be devastating for farmers and ranchers. Thus many large operations and, especially, cooperatives have engaged in hedging commodities for many years. Commodity and futures training will show beginning commodities traders how profits are made from trading commodities.
Commodities trading began with producers and their buyers coming together to create a stable market for agricultural products. Today commodity futures are still largely the province of those actively involved in agriculture. However, trading in commodities is not limited to growers and processors of agricultural products. Many who are trading commodities online are able to profit from the movements in the grain and meat markets without ever planting a row of corn or butchering a steer. Candlestick basics have worked in Japanese rice trading for centuries and Candlestick chart analysis is useful today in trading everything from rice to gold to environmental credits.