What is wheat trading?
Wheat trading involves speculating on upward or downward movements in wheat prices without owning the underlying commodity. You can trade on the rise or fall of prices.
Wheat is classified as a “soft” raw material because it is a natural raw material that is grown, harvested and processed for human consumption. This differs from “hard” raw materials, which are mined or extracted from the earth and used for manufacturing.
The raw materials are mass produced and their price is standardized, which means that it is the same all over the world. Like stocks, commodities are bought and sold on specialized exchanges. However, the only difference is that commodities can be bought and sold at current or future prices, a key factor traders should consider when considering adding wheat to their portfolio. Factors that can affect the price of wheat include political news or events, seasonal cycles and weather.
Learn more about commodities and how to trade them