Chapter 5
Down on the Farm: Trading Agricultural Products
In This Chapter
Investing in soft commodities: Coffee, cocoa, sugar, and orange juice
Exploring ags: Corn, wheat, and soybeans
Trading livestock: Cattle and lean hogs
Food is the most essential resource in human life. Investing in this sector can also help improve your bottom line. This chapter introduces the major sectors in this sub-asset class and shows you how to profit from tropical commodities like coffee and orange juice, grains such as corn and wheat, and livestock.
Profiting from the Softs: Coffee, Cocoa, Sugar, and Orange Juice
The commodities in this section — coffee, cocoa, sugar, and frozen concentrated orange juice — are known as soft commodities. Soft commodities are those commodities that are usually grown, as opposed to those that are mined, such as metals, or raised, such as livestock. The softs, as they are sometimes known, represent a significant portion of the commodities markets. They're indispensable and cyclical, just like energy and metals, but they're also unique because they're edible and seasonal. Seasonality is actually a major distinguishing characteristic of soft commodities because they can ...
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