Trading the Agriculture Markets

These are the contracts that got futures started in the United States. Bank in 1848, farmers and merchants came to Chicago to set a price on grains. Today, this market is global, accessible electronically almost anywhere and used by individuals, farmers, commercial firms, large corporate companies and government institutions.

This healthy balance of participants has created one of the most active, liquid and vibrant markets in the world for corn, wheat, soybeans as well as lean hogs and live cattle.

Grains and meats are strongly intertwined and dependent on the same fundamentals - supply and demand for the underlying commodity. Weather, politics, disease and other factors such as shipping and freight issues can impact their price volatility. And given that the world population is expected to top 9 billion people by 2050, according to the United Nations, supply and demand will be the key factor for agriculture markets, not to mention food companies that depend on them.

For traders looking for a truly global market that runs on such fundamentals, this is an asset class that can help diversify a portfolio.