Food and Fiber Commodity Market

Be aware of unique factors that can impact food and fiber commodity market investment

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.

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.

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.

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.
  • 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.