Commodities

A commodity is a basic commodity used in trade that is interchangeable with other commodities of the same type. Raw materials are most commonly used as input for the production of other goods or services. In addition to traditional goods such as Grain, gold, beef, oil and natural gas have recently also included financial products such as foreign currencies and indices, as well as cell phone minutes and bandwidth.

In addition to the buyers and producers of commodities who use commodity futures contracts for the hedging purposes for which they were originally intended, the second type of commodity trader is the speculator. These are traders who only trade in the commodity markets to benefit from the volatile price movements. These dealers never intend to manufacture or take delivery of the actual commodity after the futures contract expires. Many of the futures markets are very liquid and have high levels of daily reach and volatility, making them very tempting markets for intraday traders. Many of the index futures are used by brokers and portfolio managers to offset risk. Since commodities are not typically traded in conjunction with the equity and bond markets, some commodities can also be used effectively to diversify an investment portfolio.

While industrial raw material markets will only be temporarily affected by the current corona pandemic, the shock for the agricultural raw material markets will probably be longer-term. Our special industry knowledge and the necessary international network of experts will help you to clear the fog.