Commodities
These are the things that we consume to live. There are three major classes of commodities. Energy, Metals, and Grains. Each is broken down into its own market. crude oil is the most traded of all commodities and is the King of energies along with RBOB(gasoline) and heating oil (diesel fuel). You also have natural gas and propane and other type fuels. crude affects most all of these individual markets as a whole but they also trade on their own Supply and Demand situations. The King of Metals is Gold and the King of grain is Corn. These all have there subcategories. Metals have copper, silver, platinum, etc.. the grains have Corn, Soybeans, different classes of wheat, oats, barley, canola and so on. Corn and beans have their own complexes with beans having the Soybean meal and Soybean oil markets. The two submarkets can drive the price of beans themselves because they have their own supply demand situations. If there is a glut of meal or oil, they go down and will pull down the price of Soybeans because that is lower demand on a bean product. Corn is the exact same way with Ethanol and dried distillers grains or DDGs. These commodities can cross classes to affect the other as well. If heavy selling is going on in crude oil, it can spill over into the grains and metals and cause them to sell off as well. Maybe not as much as crude, but it can cause a general sell off in all commodities. The value of the dollar also has a lot of impact on commodity prices. I was looking at a corn chart the other day and noticed the last major high price in the corn market came on the same day as the last major low price of the dollar. More on this later as these markets are related like stocks and Bonds are.CF
The Original Woodsgoat Hater
2011 NWR Bash Yellow Perch Champion