Top 10 Traded commodities in the World
Global commodity flows and their volatility and the organic relationship between commodities in risk management strategies are some of the main topics in the world today. Commodity trading as an asset class is unique. Its risk-reward profile and trading patterns are different from other asset classes. Understanding the fundamental differences in commodities is absolutely necessary for profitable trading, particularly if you're planning to trade futures contracts.
Commodity Trading is the buying and selling of raw materials like gold. Silver and oil Trading usually takes place on a commodities exchange such as the Chicago Mercantile Exchange's Globex platform. Commodities contracts are negotiated for a single delivery date in the future, from one month to two years later. Investors can profit from the difference between current and future prices through long or short positions.
Gold
Gold was one of the first pure commodities to be traded in a market and remains the standard against which other commodities are priced. It is a chemically inactive metal and is therefore found uncombined in nature. It is the most malleable and ductile metal, making it easy to work. Gold alloys are very durable, both practically and aesthetically. Gold has a high luster which gives it a beautiful appearance when crafted into jewelry or other decorative objects. Gold is a chemically inactive metal and is therefore found uncombined in nature. This is a special material whose price is up or down and affects other commodities.
West Texas Intermediate (WTI) Crude Oil
West Texas Intermediate (WTI) Crude Oil is one of the most widely traded and benchmark crude oils. It is refined in Midwestern and Gulf Coast refineries, where much of the petroleum-based products are sent to the East Coast. This grade is described as light because of its relatively low density and sweet because of its low sulfur content. Due to these qualities, WTI is perfect for refining gasoline and other distillates. WTI is refined mostly in the Midwest and Gulf Coast regions in the U.S.
Soybeans
Soybean commodities are traded on the Chicago Board of Trade. Producers and consumers can use the commodities market to increase their revenues/reduce costs. The main commodity sectors are energy, metals, and agriculture. Soybean futures were one of the first futures contracts to be traded on the Chicago Board of Trade, having begun in 1867. Soybeans are a legume crop grown in temperate climates. They are planted primarily to make oil and soy meals. The bulk of U.S. production is exported to China, primarily for feed and as a vegetable oil replacement.
Brent Crude Oil
It's an industry standard for pricing oil. It is a reliable benchmark price for nearly two-thirds of the world's oil, including Western Europe, Asia, Canada, and the U.S. Gulf of Mexico. Brent Crude Oil futures are traded on Intercontinental Exchange (ICE), a leading global exchange group. The contract trades in U.S. Dollars per barrel, excluding VAT, and represents the most cost-effective way to hedge against the price of oil at sea. As one of the only actively traded contracts regulated by international standards, Brent Crude futures provide customers with a reliable benchmark price for oil trading. Brent Crude Oil is a global benchmark for crude oil pricing. It is extracted from the North Sea and comprises Brent Blend, Forties Blend, Oseberg, and Ekofisk crudes (also known as the BFOE Quotation). It serves as a benchmark price for nearly two-thirds of the world's oil, including Western Europe, Asia, Canada, and the U.S. Gulf of Mexico.
Natural Gas
Natural Gas is a traded commodity that results from the natural decay of organic matter and is widely considered an excellent hedge against inflation. It is used to produce products such as fertilizers, plastics, and synthetic fibers. The demand for natural gas has consistently grown, and it is expected to increase by 50% over the next twenty years.
Corn
Corn is a commodity that is always in high demand. The rising consumption of corn helps boost crop prices, so it's an effective indicator of economic strength. The commodity corn can be used in a wide range of products. A byproduct of refining corn is High Fructose Corn Syrup. Corn syrup, sugar, and other sweeteners are used in soft drinks, candy, desserts, and many other food items. Corn oil is widely available at grocery stores for cooking and baking.
Copper
Copper is a mineral that is extremely vital to nearly every industry and used in almost all modern electrical devices, circuit boards in computers, refrigerators, and radios, among many other things. Copper is an excellent conductor of heat and electricity. It has a spot on the commodity market. Since copper is so widely used, numerous factors can affect its value, including industry supply and demand and innovation, and technological advancements.
Silver
Silver is one of the most traded commodities in the world. This precious metal has been used as a symbol of value, a medium of exchange, and a store of wealth for centuries. From ancient civilizations to the modern-day, silver has played an important role in many societies worldwide. Silver has been used as a form of currency by more people throughout history than any other metal, even gold. While the price of silver might fluctuate in the short term, it has always retained its value throughout history, with civilizations everywhere putting their trust in this precious metal.
Coffee
Coffee is one of the world's most traded commodities, so all eyes are on Brazil, the largest producer of coffee. Over the past five years, after a good harvest, Brazilian farmers have been slowing down their production to push up the price they receive. Coffee is also top of the most widely consumed beverages, with an estimated annual consumption of 49 million 60 kg bags as of 2012, or 8.7 kilograms per capita.
Sugar
Sugar has also been a commodity for trade for a long time, with annual consumptions of more than 257 million tons, with more sugar beet land being grown each year globally.
Cotton
Cotton is one of the leading traded commodities in the textile industry, a multibillion-dollar industry responsible for the livelihoods of more than 300 million people. It is a highly versatile natural fiber used for all types of products, from clothing, linens, and other household fabrics, to personal care products like cotton swabs. Cotton is also a natural product that is biodegradable and recyclable, making it an excellent choice for environmentally conscious consumers.
FAQs
What is the most sold commodity in the world?
Crude oil: Ii is one of the most sought-after commodities globally because of its many uses in its refined forms like petrol, lubricant, and diesel.
