Agricultural Commodities Basics

Agricultural commodities, sometimes called "softs" alongside grains, cover a wide range of goods including grains, coffee, sugar, cotton, and livestock. Their prices are shaped by a distinct set of factors compared to metals or energy.

Key Drivers

• Weather conditions during growing seasons can significantly affect crop yields and, in turn, supply available to the market.
• Planting and harvest cycles create recurring patterns in supply availability throughout the year.
• Global trade policy, including tariffs or export restrictions, can affect how much of a given crop reaches international markets.
• Storage and spoilage considerations, since many agricultural goods are perishable in ways that metals are not.