Few Essential Commodities That Are Traded

by Steve Nugent - Date: 2010-10-01 - Word Count: 613 Share This!

Segregating commodities into different types makes it easier for traders and investors to compare price. Apart from making commodity trading convenient it also makes it easier to research in the commodities. There are different types of commodities that trade in the commodity markets; however knowing a few essential ones before you are commodity trading is important. It will help you make choices on what you want to trade in and commodities that are much more profitable than the rest.

Let's look at some very common commodities that are generally traded in

Energies - One of the most influential commodities that are traded in is energy. It consists of different products that give out energy to heat and power up homes and business. The commodities that make up energies are heating oil, petroleum, crude oil, natural gas, propane, coal etc. the prices of these commodities are fixed depending on the contract volume.

Grains - The second most traded commodity are grains. This includes grains like rice, soybean, wheat, corn etc. It also consists of a few agricultural produce.

Softs - This commodity includes cotton, sugar, cocoa, coffee and orange juice. The CSCE which is the Coffee, Sugar and Cocoa Exchange are the ones that are most commonly exchanged. However oranges are not traded in its own type, the reason being that a huge percentage of it (80%) are traded as a frozen concentrate. The FCOJ (Frozen Concentrated Orange Juice is one thing that even the New York Cotton Exchanges trade in.

Livestock - Livestock also most commonly known as meats is traded commonly in the commodity market. This includes pork lean hogs, cattle etc. The place where the primary livestock is trades is the Kansas City Board of Trade (KCBT) where the exchange takes place. The volatility of this particular commodity is much less as compared to the others. However this particular commodity also depends on grains to a small extent, since livestock feed on grains.

Financials - Financials also regarded as US Treasury Bonds, CBOT etc fall under this category. It also consists of exchanging trades stocks as financial commodity.

Metal Trading - Metal commodity trading is probably the most widely traded commodity in the commodity trading market. You can infact bifurcate metals into several categories like precious metals, non precious metals, scrap metals, alloys, base metals etc. Here is a list of some of the most commonly traded metals in the commodity trading market.

Precious Metals - This is the most widely traded metals. The metals are gold and silver and its prices are traded in dollars for an ounce. Other precious metals that fall into this category include platinum, Iridium, Palladium, Phodium, Ruthenium.

Base metals - These are metals that are known to oxidize and even corrode with the slightest reaction with acids. Metals that belong to this section are lead, zinc, aluminum, nickel, copper and tin.

Carbon Steel - Carbon steel is a metal alloy that does not contain much of alloy materials apart from carbon. It is a combination of carbon and iron and has very low carbon contents and has similar properties like that of iron.

Metal Scrap - This is nothing but left over metal that still has the potential to be reused for any other purpose. There are several traders who trade in scrap metal since it is easily available, and has a good potential to let you earn profits.

The common understanding about commodities is that they are generally non processed products that are bought and sold in the commodity trading market.

The best thing of commodity trading market is that it is much more profitable than investing and trading in bonds and stocks. Commodity trading can be done by anyone who wants to invest and manage an extensive portfolio.

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