The food and fiber commodity market is quite volatile. But it is this volatility that makes the sector such an attractive investment. Weather, insects, even politics influence food commodities prices. A variety of commodities make up the market sector, and investments are based on future production of those products.

Food commodity futures and fiber commodity futures trade at the New York Mercantile Exchange and ICE Futures U.S., formerly the New York Board of Trade. To gather information and invest in food commodities and fiber commodities, do the following:

1. Conduct research in food commodity trading and fiber commodity trading.

2. Choose one or more food commodities or fiber commodities to track.

3. Invest in selected futures in the food commodity market.

Action Steps
The best contacts and resources to help you get it done

Learn the steps for investing in fiber commodities and food commodities

To prepare for investing, learn the ins and outs of futures trading and discover how commodities are traded.

I recommend: Apogee offers the latest prices, price fluctuations, and other technical details for the market. A good place for you to find investment advice is seasonal commodity stratagems. At TFC Commodity Charts you can find details about commodities to help you select your investments. Investigate the historical performances of various food and fiber products for perspective. Consider registering for the free market analysis for the food and fiber sector.

Research the specifics of the fiber and food commodities market

The soft fiber and food commodity market is comprised of futures such as cocoa, coffee, cotton, orange juice and sugar. Remember that many factors such as weather and drought, insects, disease, international politics and global consumer demand impact futures prices. Learn to analyze future crop expectations.

I recommend: Commodity Futures and Equity Analytics is a good place to start the study of food and fiber commodities. Investigate each product that comprises this futures market. Be sure to study the seasonal preview and seasonal charts. General information about factors that impact production and discussion about advances are available at the Agricultural Marketing Resource Center. Look into factors for food products such as market trends, international issues and food supply.

Buy selected food and fiber commodity futures

Choose an investment group and broker with whom you are comfortable. Decide how much you are ready to invest in futures trading. Consider a free practice account available at many brokers to help you get a feel for commodity trading.

I recommend: INO.com provides current trading information on food and fiber commodities. Check the chart for the products you've chosen. Also review the futures prices for the upcoming months. Note that the website provides all the information in chart form as well. Lind-Waldock provides abundant information about futures trading as well as a number of ways to invest, including ten free trades. When you have the information you need, contact an investment agent.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Remember that most food and fiber commodities production happens outside the United States. For this reason, it is important to stay connected to professional information sources. A number of industry sources and investment groups provide online updates.