What Are the Top 10 Traded Commodities in the World?

what is the most traded commodity in the world

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Commodities are natural resources and agricultural products that are traded in bulk. Examples include wheat, corn, cattle, cotton, lumber, https://www.day-trading.info/ sugar and fossil fuels. Precious metals such as gold as well as domestic and foreign currencies are also traded as commodities.

  1. In 2022, 37,091,448 Futures and Options contracts were traded on the LME.
  2. Gold is widely considered to be a ‘safe-haven’ asset, as it tends to hold its value or rise in times of economic and political uncertainty.
  3. There are a few ways to determine the most traded commodities.
  4. The country has rapidly urbanised – requiring vast amounts of steel – and experienced phenomenal economic growth.
  5. They are used to make a variety of food and agricultural products, including soyabean meal (animal feed), soyabean oil, and meat and dairy substitutes such as tofu and soy milk.

It is often combined with other elements – such as copper, zinc and magnesium – to form alloys that are both strong and light. For these reasons, aluminium, and alloys containing it, are useful for commercial applications including the manufacture of vehicles and planes, packaging (eg cans) and construction. The majority of aluminium is produced in China, followed by Russia, Canada and India. Steel is an alloy of https://www.investorynews.com/ iron and carbon that often includes other elements such as manganese, chromium, nickel and tungsten. It is an important commodity because it is extremely strong and relatively low cost, making it suitable for industrial uses in construction, infrastructure and manufacturing. For example, coffee, which is one of the most traded commodities in the world, cannot be simply picked from a plant and put into a cup.

WTI Crude Oil

The majority of corn is grown in the US, followed by China, Brazil and Argentina. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. In 2022, 39,350,157 Futures and Options contracts of Soybean were traded on the CBOT (Chicago Board of Trade). In addition to the main contract, there are various soybean related commodities.

Entering the second quarter of the year, macroeconomic headwinds blew bearish sentiment as the impact of sky-high commodities prices started to take a toll. The US Federal Reserve (Fed) kicked off its tight monetary policy with aggressive rate hikes to bring down the inflation rate that hit four-decade high due high petroleum prices. In June 2020, following the WTI Futures price crash, the NYMEX (New York Mercantile Exchange) revived trading volumes, with an average of 1,870 contracts being traded each day. Everything from valuable and practical commodities like precious metals and oil to the less obvious and questionable such as unsecured debt and catastrophe bonds. This year could likely be a volatile one for commodities with myriads of factors, including macroeconomic headwinds and geopolitical tensions, pulling assets to different directions.

It is another high-quality ‘sweet light’ oil, which has an even lower sulphur content and density than Brent crude. WTI oil is drilled in various US states – including Texas, Louisiana and North Dakota – and sent to Cushing, Oklahoma for price settlement. It boasts industrial applications in electronics, batteries, and medical devices. Its investment value, alongside its industrial use cases, contributes to its demand and high trading volume.

what is the most traded commodity in the world

For example, Soybean Meal and Soybean Oil, which both have high annual turnover on the CBOT. In 2022, 37,091,448 Futures and Options contracts were traded on the LME. COMEX holds the record for the most traded copper Options contracts in a single day. On Friday the 21st of September ,089 contracts (91,727 metric tons) were traded. Global steel production in 2022 was 1,803 billion tonnes, and more than 530 million Futures Contracts of Steel Rebar were traded on the Shanghai Futures Exchange.

What are the Top 10 Most Traded Commodities in the World

However, it is also used to produce alloys including brass and bronze. Copper is primarily mined in Chile, followed by China, Peru and the US. Technology, construction, fashion and investing are the main industries which demand vast amounts of metals.

what is the most traded commodity in the world

Therefore, always pay attention to whether a market has sufficient liquidity and interest before taking the plunge and trading or investing in that asset. Because of its many uses in industry and electronics, the price of copper can fluctuate significantly in line with economic output. Supply, on the other hand, can be affected by trade disputes, seasons and infrastructure concerns – particularly within key South American suppliers such as Chile and Peru. Goldis a precious metal that has been highly sought after for millennia, due to its metallic yellow colour and sheen. Nowadays it is primarily used for jewellery production and as an asset for investment. However, a small amount is also used in industry as it is highly resistant to most chemical reactions and conducts electricity.

Low-volume commodity markets are often prone to wild price swings. Silveris the second precious metal on our list, and is another element that has been highly sought after for thousands of years. Unlike gold, roughly 50% of demand for silver can be attributed to its industrial uses, which include solar panels, photographic films and electrical contacts. Like gold, however, a large proportion of demand for silver is also driven by jewellers and investors. Trading financial products carries a high risk to your capital, particularly when engaging in leveraged transactions such as CFDs. It is important to note that between 74-89% of retail investors lose money when trading CFDs.

What are commodities?

It remains the investment of choice in times of uncertainty, such as wars and hedge against inflation. It is not surprising that gold ranks second on the list of top traded commodities in Capital.com. Crude oil prices have rallied since last year as demand gradually recovered as more countries eased Covid-19 restrictions. Prices received a boost from sanctions against https://www.topforexnews.org/ Russia’s oil and gas exports following the country’s invasion of Ukraine, heightening worries about supply crunch. In the past, prices of WTI oil have been heavily dependent on US consumption. This is because Cushing is a landlocked area, making it difficult to transport oil internationally and leading to a divergence in the cost of WTI and Brent crude barrels.

“It’s been another disappointing performance for anybody who is expecting silver to start racing away this year,” said David Jones, Capital.com’s chief market strategist. Jones put $20.40/ounce as the short-term key level for silver. In the first quarter of 2022, the gold price had rallied near its record high of above $2,000 an ounce seen in mid-2020, amid uncertainty on the onset of the war between Russia and Ukraine. However, gold’s rally quickly lost its shine by May as the Fed’s aggressive rate hikes to combat higher than anticipated inflation rate. Despite the global push to reduce oil consumption and switch to renewable energies, oil has remained one of the most valuable commodities.

There are rules governing the purity of metal alloys and quality of foodstuffs. However, whether commodities are a good investment for you depends on your risk tolerance, investing goals and portfolio composition. J.P. Morgan expected commodities to be on pace to deliver a third consecutive year of significant positive returns – up 30% year-to-date.

Precious and Industrial Metals

This is based on an analysis of the top 40 most exchanged agricultural, energy and metal futures contracts of 2017, using figures from the Futures Industry Association (FIA). The most traded commodities for decades have been firmly established as the biggest markets, most liquid and commonly traded worldwide. The significance of these most traded goods has even influenced the top 5 most traded currencies in the world.

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