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Trading Agricultural Commodities

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http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities


Trading Agricultural Commodities

Pork bellies, live cattle, Durham wheat, weather forecasts from Brazil, price supports for exports to Asia. Welcome to the world of trading agricultural commodities. Trading agricultural commodities takes place under two general categories, agricultural (grains, and food and fiber) and livestock and meat. Agricultural commodities are traded in the commodities futures markets. Here is a sample of agricultural commodities and where they are traded:

Grains, Food and Fiber

Commodity

Primary Exchange

Minimum Quantity

Symbol

Corn CBOT 5000 bu C/ZC (Electronic)
Corn EURONEXT 50 tons EMA
Oats CBOT 5000 bu O/ZO (Electronic)
Rough Rice CBOT 2000 cwt RR
Soybeans CBOT 5000 bu S/ZS (Electronic)
Rapeseed EURONEXT 50 tons ECO
Soybean Meal CBOT 100 short tons SM/ZM (Electronic)
Soybean Oil CBOT 60,000 lb BO/ZB (Electronic)
Wheat CBOT 5000 bu W/ZW (Electronic)
Milk Chicago Mercantile Exchange 200,000 lbs DC
Cocoa ICE 10 tons CC
Coffee C ICE 37,500 lb KC
Cotton No.2 ICE 50,000 lb CT
Sugar No.11 ICE 112,000 lb SB
Livestock and Meat

Lean Hogs Chicago Mercantile Exchange 40,000 lb (20 tons) LH
Frozen Pork Bellies Chicago Mercantile Exchange 40,000 lb (20 tons) PB
Live Cattle Chicago Mercantile Exchange 40,000 lb (20 tons) LC
Feeder Cattle Chicago Mercantile Exchange 50,000 lb (25 tons) FC
Weather in the Ukraine, Brazil, and the North American Great Plains

It is often quite possible to profit from the news in day trading agricultural commodities. Traders often wait for agricultural reports in order to understand where fundamentals of supply and demand are going. Although food is consumed locally it may have been produced anywhere in the world. Certainly prices across the globe reflect the ability to transport agricultural products virtually anywhere, if the price is right. The final price of a commodity depends upon supply and demand. If a drought threatens wheat production in the Ukraine or unusually heavy rains threaten to destroy much of Brazil’s soybean harvest, prices are bound to go up. In trading agricultural commodities, keeping an eye on the weather forecasts is part of the job. Likewise, if American consumption of beef products suddenly falls there may be more supply of live cattle and feeder cattle than demand and the price will fall. Those trading agricultural commodities such as wheat often consult United States Department of Agriculture agency reports such as the wheat outlook. This report looks at supply, use, prices, and trade for wheat, including supply and demand prospects in major importing and exporting countries. The report shows United States wheat information by class. The November 15, 2012 report starts as follows:

“projected u.s. wheat ending stocks for 2012/13 are lowered 44 million bushels as higher feed and residual disappearance more than offsets a reduction in projecte

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Trading Agricultural Commodities

  1. 1. Trading Agricultural CommoditiesBy www.ProfitableTradingTips.com
  2. 2.  Pork bellies, live cattle, Durham wheat, weather forecasts from Brazil, price supports for exports to Asia.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  3. 3.  Welcome to the world of trading agricultural commodities.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  4. 4.  Trading agricultural commodities takes place under two general categories, agricultural (grains, and food and fiber) and livestock and meat.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  5. 5.  Agricultural commodities are traded in the commodities futures markets.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  6. 6. Here is a sample of agricultural commodities and where they are traded: Grains, Food and FiberCommodity Primary Minimum Symbol Exchange Quantity Corn CBOT 5000 bu C/ZC (Electronic)http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  7. 7. Corn EURONEXT 50 tons EMA Oats CBOT 5000 bu O/ZO (Electronic) Rough Rice CBOT 2000 cwt RR Soybeans CBOT 5000 bu S/ZS (Electronic)http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  8. 8. Rapeseed EURONEXT 50 tons ECO Soybean CBOT 100 short SM/ZM Meal tons (Electronic) Soybean Oil CBOT 60,000 lb BO/ZB (Electronic) Wheat CBOT 5000 bu W/ZW (Electronic)http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  9. 9. Milk Chicago 200,000 lbs DC Mercantile Exchange Cocoa ICE 10 tons CC Coffee C ICE 37,500 lb KC Cotton No.2 ICE 50,000 lb CT Sugar No.11 ICE 112,000 lb SBhttp://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  10. 10. Livestock and Meat Lean Hogs Chicago 40,000 lb LH Mercantile (20 tons) Exchange Frozen Pork Chicago 40,000 lb PB Bellies Mercantile (20 tons) Exchangehttp://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  11. 11. Live Cattle Chicago 40,000 lb LC Mercantile (20 tons) Exchange Feeder Chicago 50,000 lb FC Cattle Mercantile (25 tons) Exchangehttp://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  12. 12. Weather in the Ukraine, Brazil, and the North American Great Plains  It is often quite possible to profit from the news in day trading agricultural commodities.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  13. 13.  Traders often wait for agricultural reports in order to understand where fundamentals of supply and demand are going.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  14. 14.  Although food is consumed locally it may have been produced anywhere in the world.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  15. 15.  Certainly prices across the globe reflect the ability to transport agricultural products virtually anywhere, if the price is right.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  16. 16.  The final price of a commodity depends upon supply and demand.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  17. 17.  If a drought threatens wheat production in the Ukraine or unusually heavy rains threaten to destroy much of Brazil’s soybean harvest, prices are bound to go up.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  18. 18.  In trading agricultural commodities, keeping an eye on the weather forecasts is part of the job.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  19. 19.  Likewise, if American consumption of beef products suddenly falls there may be more supply of live cattle and feeder cattle than demand and the price will fall.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  20. 20.  Those trading agricultural commodities such as wheat often consult United States Department of Agriculture agency reports such as the Wheat Outlook.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  21. 21.  This report looks at supply, use, prices, and trade for wheat, including supply and demand prospects in major importing and exporting countries.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  22. 22.  The report shows United States wheat information by class. The November 15, 2012 report starts as follows:http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  23. 23.  “Projected U.S. wheat ending stocks for 2012/13 are lowered 44 million bushels as higher feed and residual disappearance more than offsets a reduction in projected exports.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  24. 24.  Production for 2012/13 is raised 1 million bushels based on the latest estimate from the September 30 Small Grains report.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  25. 25.  Feed and residual use is projected 95 million bushels higher reflecting the September 1 stocks that indicated higher-than-expected June-August disappearance.” - etc.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  26. 26. Making a Profit in Trading Agricultural Commodities  With precise estimates of crop forecasts and demand issues, trading agricultural commodities over the longer term becomes a matter of fundamental analysis.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  27. 27.  However, market reaction to breaking news and reports often leads to market inefficiencyhttp://profitabletradingtips.com/trading-investing/trading-agricultural-commodities
  28. 28.  at which times technical analysis of price patterns is often the better guide to making a profit trading agricultural commodities.http://profitabletradingtips.com/trading-investing/trading-agricultural-commodities

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