Bulls n' Bears

Basic Market Economics for Commodities Market, Wheat

Interest over commodities market, wheat, is climbing as more people think about placing their money on this agricultural product. In Northern America alone, there are three markets for commodity futures and these are the Chicago Board of Trade, the Kansas City Board of Trade and the Minneapolis Grain Exchange.

Wheat is a grain that is commonly used in various pastries and it is second to rice as a staple. The gluten content of wheat is also higher compared to rice and commodities market,

wheat exist due to the wide cultivation of this grain.
However, before deciding to put your money on wheat future, you should know the basic economics behind this grain. Having a firm understanding of commodities market, wheat will also go a long way.

Basically, the factors that can include commodities market, wheat include crop size and conditions, standing economic and agricultural policies by major wheat importers and exporters, local demand for flour milling, currency strength. However, these factors are summarized into the law of supply and demand. This simply means that commodities market, wheat will respond depending on the interplay of these forces. To illustrate, when the supply of wheat is excessive, the price plummets down. However, when there is a shortage or a sudden surge in demand, prices climb up.

In commodities market, wheat, the grain classification depends on the properties of the commodity. Each wheat class has various purposes and this will help investors see which kind will be more profitable for them. This grain has a high yield per acre making it the ideal cash crop. Aside from that, the estimated global consumption of this grain is between 580 to 560 tons and there is reason to expect that these figures will increase over time.

With this statistics, it is assessed that trading wheat is highly profitable and entering the commodities market, wheat is a great avenue for investors who want make money on grain futures.