Best Brokers For Trading Agricultural Commodities

The Ultimate Guide to

Choosing a Broker
For Agricultural Commodities

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

• Why scored high for agricultural commodities (Jump to section)
• Who is (and isn’t) suitable for (Jump to section)
• An in-depth feature comparison of the top #3 brokers (Jump to section)
• An overview on agricultural commodities (Jump to section)

Ready?

Part 1

Why Choose
For Agricultural Commodities?

scored best in our review of the top brokers for agricultural commodities, which takes into account 120+ factors across eight categories. Here are some areas where scored highly in:

offers one way to trade: . If you wanted to trade WHEAT through copy trading or other means, skip to part two.

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

have a trust score, which is . This is largely down to them being regulated by , segregating client funds, being established for over years, and much more. For comparison:

Trust Score comparsion

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We've compared these in detail in part three of this guide.

Part 2

Who is (& Isn’t)
Suitable For

As mentioned, allows you to trade in one way: .

To trade with , you'll need a minimum deposit of $. offers a range of different account types for different traders including a , .

Finally, isn't available in the following countries: . They do not offer islamic accounts either.

Part 3

A Comparison of vs. vs.

Want to see how stacks up against and ? We've compared their spreads, features, and key information below.

Spread & fee comparsion

Comparison of account & trading features

Part 4

Agricultural Commodities Trading

Popular Commodities Trading Broker

CMC Markets offers over 10,000 instruments for traders which include a wide selection agricultural commodities. Some of the agricultural products available to trade with CMC Markets include:

*All information collected from https://www.cmcmarkets.com/, see website for full terms and conditions. Your capital is at risk. Last updated on January 26, 2017.

Agricultural commodities are classified as soft commodities. Precious metals such as gold, and natural resources such as oil and gas are classified as hard commodities. Some commonly traded agricultural commodities include livestock, meat, dairy, coffee, cocoa, sugar, cotton, and grains. Frozen meats such as frozen pork bellies, have become a popular agricultural commodity. Common livestock commodities include cattle and hogs and dairy commodities may include butter, eggs, milk and cheese. Popular grains are wheat, soybean, corn, oats, barley, and rice.

History of Agricultural Commodities

The trading of agricultural commodities dates back to 8,500 BC when an agricultural revolution led to the trading of agricultural products between different settlements. The futures market for agricultural products developed during this period due to the fact that price changes were affecting the profitability of business and sellers searched for ways to earn while they waited for a suitable buyer. In addition, traders had to find suitable storage solutions for their stock, which could be costly.

The very first agricultural futures traded was rice as far back as the 17th century in Japan. However, there are some conflicting views on whether that was actually the first time that futures trading occurred. In the 1800’s, farmers found that their perishable items would rot or lose quality the longer they had to be stored. At the same time, price changes would eat into any expected profitability. This led to the creation of the first forward contract whereby the price was determined beforehand and the buyer was allowed to make payment before receiving the goods. The proliferation of forward contracts led to the first American Exchange, called the Chicago Board of Trade (CBOT) which was established in Chicago in the year 1848. This body standardised the entire process and gave rise to standard futures contracts.
The trading of agricultural commodities eventually gave rise to the trading of precious metals and financial futures. The S&P 500 and other indices were included among tradable futures in the 1980s and 1990s.
Some of the top commodity exchanges in the world are as follows:

Top Agricultural commodity exchanges in the world are as follows:

• The Chicago Mercantile Exchange (CME) – Headquartered in Chicago and offers a range of contracts apart from commodity contracts.
• Chicago Board of Trade (CBOT) – Oldest futures exchange and is a subsidiary of the CME group.
• New York Mercantile Exchange (NYMEX) – Largest physical commodity exchange in the world.
• Intercontinental Exchange Inc. (ICE) – USA based exchange.
• Multi Commodity Exchange (MCX) – Based in Mumbai, India.
•Dalian Commodity Exchange (DCE) – Based in China and founded in 1993.
•Shanghai Futures Exchange (SFE) – Based in Shanghai, China. The only agricultural commodity currently traded on this exchange is natural rubber.
•Nasdaq Commodities OMX – Based in New York. Seafood is the only agricultural commodity traded on this exchange.
•BMF Bovespa – Based in Sao Paulo, Brazil. This exchange trades a wide range of agricultural commodities.