Top 5 Most Traded Commodities On A Global Level.
Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money When it comes to trading commodities, demand, supply, and liquidity should be factors to consider. This is because the demand and supply of a commodity are linked to the ease with which a trader can Buy and Sell the commodity. Liquidity on the other hand is a measure of how many buyers and sellers are present and whether transactions can take place easily.
Also, when there is a significant level of trading activity and where there is both high supply and demand the relevant market would be very liquid. A liquid market is generally associated with less risk, as there is usually someone else willing to take the other side of a position.
In other words, before trading in any commodity check the demand, supply, and liquidity of the market to avoid high risk and loss.
In this article we will highlight the top 5 most traded commodities on a global level;
West Texas Intermediate (WTI) Crude Oil
West Texas Intermediate, also known as Texas light sweet, is a grade of crude oil used as a benchmark in oil pricing. This grade is described as Medium crude oil because of its relatively low density, and sweet because of its low sulfur content. It is the underlying commodity of New York Mercantile Exchange’s oil futures contracts.
Brent Crude Oil
Brent Crude is extracted from the North Sea and is a major trading classification of sweet light crude oil. And this serves as a benchmark price for purchases of oil worldwide. This grade is described as light because of its relatively low density, and sweet because of its low sulfur content.
Soybeans are one of the most active and popular agricultural commodities. According to the US Department of Agriculture (USDA), the US is the leading producer and exporter of soybeans. They are mainly exporting them to China, the EU, Japan, Mexico, and Taiwan. Soybeans account for 90% of all oilseed production in the US. Which accounted for 44% of the world’s Soybean export in 2010 and 35% of the world’s Soybean production in 2010.
Natural Gas is a non-renewable hydrocarbon used as a source of energy for heating, cooking, and electricity generation. It is used as fuel for vehicles. Also as a chemical feedstock in the manufacture of plastics and other commercially important organic chemicals.
Corn which is an important food source is also used in the production of animal feed and ethanol. The major producers of corn around the world are Argentina, Brazil, China, and the US. As corn is an agricultural product, its supply can be adversely affected by bad weather. Another factor that can affect the price of corn is the number of farming subsidies provided by government agencies. In the US, the production of corn is heavily subsidized. This is in order to provide a strong incentive for farmers to keep growing this crop.