Aug 7, 20235 min read

The Top 10 Most Traded Commodities: Insights by Maharishi Capital

Commodities, as the foundational building blocks of the global economy, play a vital role in shaping industries and markets. From natural resources like oil and metals to agricultural products like soybeans and corn, commodities have a profound impact on our daily lives. Notably, the volatility in commodity prices offers traders opportunities to capitalize on market fluctuations. In this article, we delve into the top 10 most traded commodities, as identified by Maharishi Capital, exploring their significance, influencing factors, and trading insights.

1. Crude Oil: Brent Crude and WTI:

Crude oil's indispensability is unrivalled, fuelling industries and powering economies worldwide. Brent crude, a high-quality oil extracted from the North Sea, and West Texas Intermediate (WTI), another premium-grade crude, serve as benchmarks for global oil prices. Demand tied to economic performance and supply influenced by factors like OPEC decisions and shale production drive their prices.

2. Steel:

As an alloy of iron and carbon, steel's versatility in construction and manufacturing underpins its significance. Global economic trends, costs of constituent materials, and recent geopolitical trade disputes, such as those involving China, have steered steel prices.

3. Soybeans:

Soybeans' rich protein content and cost-effectiveness make them pivotal in producing animal feed, biodiesel, and dietary substitutes. Global demand for these applications, alongside factors like weather conditions and currency fluctuations, affect soybean prices. The US dollar's strength also plays a role, given the US's leading soybean production.

4. Iron Ore:

Iron ore, essential for steel production, mirrors economic growth and consumption patterns, particularly in China. The price fluctuations have been significantly impacted by China's rapid urbanization and economic expansion. Notably, shifts in demand due to global trade dynamics, as seen during Trump's tariff implementations, have influenced iron ore prices.

5. Corn:

Corn's role in animal feed, ethanol, and various food products renders it an essential soft commodity. Its price trajectory is closely linked to demand for biofuels and feed, as well as the strength of the US dollar. Government subsidies, particularly in the US, also contribute to price stability.

6. Gold:

Gold's timeless allure as a precious metal for jewelry and investment stems from its stability during economic uncertainty. Its value is inversely related to the strength of the US dollar, often making it a safe-haven asset during turbulent times.

7. Copper:

Copper's conductivity and versatility in industries such as electronics and construction underscore its importance. The metal's value corresponds to economic output, supply concerns, and trade dynamics, especially within key producing nations like Chile and Peru.

8. Aluminium:

Aluminium's lightweight nature and corrosion resistance make it vital for transportation, construction, and packaging. Its price fluctuates with oil and electricity costs due to energy-intensive production processes. Economic developments, particularly in China, and trade policies further influence aluminium prices.

9. Silver:

Silver's dual role in industry and investment sets it apart. While its industrial uses, like in solar panels, impact its demand, it also holds safe-haven appeal during economic instability. Unlike gold, silver's value is more connected to industrial and technological trends.

10. Natural Gas:

As a cleaner alternative to oil, natural gas powers industries and homes. Its pricing is sensitive to factors like weather conditions, demand for heating and cooling, and global economic trends. Storage levels and geopolitical events also sway natural gas prices.

Conclusion:

Maharishi Capital's exploration of the top 10 most traded commodities reveals a diverse landscape where each commodity responds uniquely to market dynamics. Whether it's the demand-supply balance, economic trends, geopolitical factors, or technological advancements, these commodities offer ample trading opportunities. Aspiring traders must conduct thorough analyses to grasp the intricacies of each market before embarking on their trading journey. The world of commodities is indeed a treasure trove of opportunities for those who understand its nuances.

Disclaimer:

The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing or trading in stocks, currency, commodity or any other financial instrument comes with a risk of financial loss.

Author

Meghna Mishra

Sr. Research Analyst

Maharishi Capital

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