Top 9 Commodities by Traded Volume

Commodities are the cornerstone of the global economy, holding substantial influence not only within various industries but also in everyday life. The combination of volatile price movements, high liquidity and availability of diversification makes commodity trading highly attractive to traders. But commodities are not all the same. Read ahead to discover how commodities are defined and classified and which commodities are the most popular by traded volume.

What are Commodities?

Commodities are standard, tangible goods essential for production and consumption, forming the backbone of an economy. They encompass raw materials used in manufacturing, agricultural staples, precious metals, livestock, and more. Commodities can be broadly categorized into two main types:

1. Hard Commodities: These are natural resources that must be mined or extracted, including metals and energy products. Examples include gold, crude oil, natural gas, and silver.

2. Soft Commodities: These consist of livestock and agricultural products such as grains and fibers. Examples include wheat, soybeans, corn, and sugar.

What is Commodity CFD Trading?

Commodity CFD (Contract for Difference) trading allows investors to speculate on the price movements of various commodities without owning the physical assets. Instead of buying or selling the actual commodity, traders enter into contracts that reflect the price changes of the underlying asset.

Traders can access a wide range of commodities, including metals (like gold and silver), energy (such as oil and natural gas), and agricultural products (like wheat and corn). Traders can profit from both rising and falling markets. If they believe the price of a commodity will increase, they can go long (buy). Conversely, if they anticipate a price drop, they can go short (sell).

CFD trading provides access to global commodity markets through online trading platforms, enabling traders to react quickly to market changes. Commodity CFD trading offers flexibility and opportunities for profit in various market conditions, making it an appealing choice for both novice and experienced traders. However, it’s important to understand the risks associated with leverage and market volatility.

The Top 9 Commodities by Traded Volume

Here are the most popular commodities by traded volume:

1. WTI Crude Oil
WTI (West Texas Intermediate) crude is a high-quality, light, sweet oil primarily produced in the US. As a key benchmark for North American oil prices, its trading volume is influenced by geopolitical events, supply disruptions, and global demand, with traders closely monitoring OPEC decisions and economic indicators.

2. Gold
Gold is a highly traded precious metal, favored for its safe-haven status that helps offset risk and hedge against inflation. Its trading volume fluctuates due to economic uncertainty, inflation concerns, and shifts in monetary policy. Investors turn to gold during turbulent economic times, enhancing its demand.

3. Natural Gas
Natural gas is a vital energy resource and the third-largest source of energy consumption worldwide. Its trading volume is affected by weather patterns, storage levels, and global demand. Severe weather events, such as hurricanes, can disrupt supply chains, leading to increased price volatility in the market.

4. Soybeans
Soybeans are an essential agricultural commodity used in food production and animal feed. The US, Brazil, and Argentina are major producers and exporters. Trading volume is influenced by weather conditions, trade disputes, and changes in livestock production, with trade tensions significantly impacting prices and market dynamics.

5. Corn
Corn, or maize, is a widely cultivated crop used as food, livestock feed, and raw material for products like ethanol. Its trading volume is sensitive to weather conditions, government policies, and global biofuel demand. Ethanol production significantly drives corn demand, influencing its market price.

6. Brent Crude Oil
Brent crude is a major benchmark for global oil prices, originating from the North Sea. It serves as a critical indicator for pricing various petroleum products worldwide. Trading volume is influenced by geopolitical events, supply and demand dynamics, and economic factors, reflecting trends in European and Asian markets.

7. Sugar
Sugar is a key agricultural commodity with significant importance in the global economy, widely used in the food and beverage industry, as well as for biofuels and industrial products. Its trading volume is affected by weather conditions, government policies, and shifts in consumer preferences, alongside trade agreements and tariffs.

8. Silver
Silver, known as “poor man’s gold,” is a precious metal with considerable trading volume. It serves both as a store of value and an industrial metal. Factors influencing its trading volume include economic conditions and market sentiment, as demand in manufacturing and technology sectors affects its price.

9. Wheat
Wheat is a staple agricultural commodity with substantial trading volume, essential for global food supply. Its trading is influenced by weather conditions, crop yields, and global demand. Events like droughts or floods can disrupt supply, leading to price volatility and affecting overall market dynamics.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.