How to Understand Grain Market Prices


The world of investments includes more than stock and bonds. It also includes commodities which represent the largest group of traded assets in the word. Commodities, unlike stocks, are real assets that have their own intrinsic value. Grain is a commodity used world-wide, and as the world grows so does the need for grain. As demand ebbs and flows, so does the price of grain on the open market.

  • Research weather trends. The primary driver of grain pricing is changes in demand and supply that is driven, in part, by weather trends. Better weather conditions in grain producing markets creates more supply, which lowers the price. If the weather is poor, i.e., drought or flooding, grain crops may be compromised and supply will fall, resulting in a pricing increase.

  • Understand the role of emerging markets. Demand is also influenced by an increase in demand due to population growth in emerging markets. Study and research trends in the economies. Emerging markets are defined as those countries or markets that are experiencing rapid growth. The higher the growth, the higher the grain prices.

  • Use pricing charts to monitor trends, known as technical analysis. Technical analysis looks for trends in historical price levels rather than fundamental research about the grain market. Review grain prices over the last two years and look for increases or decreases which are not explained by weather or changes in demand from emerging markets. Try to forecast the direction of grain prices based solely on historical price charts.

Related Searches


  • Photo Credit Jupiterimages/ Images
Promoted By Zergnet


You May Also Like

  • Grain Marketing Basics

    Grain marketing involves complex decisions and needs expert input, knowledge of all the marketing tools, experience and a sound understanding of the...

  • How to Understand Corn & Soybean Futures

    Corn and soybean futures are estimates of the value of commodity crops that have not yet been harvested. The practice of selling...

  • How to Read Commodities Market Data

    Given the sheer number of quotes, vendors, products and mysterious symbols when it comes to commodities market data, you might be at...

  • The Best Way to Invest in Grain Stock

    You can invest in grain via three methods: by purchasing shares of agricultural manufacturers; purchasing an exchange-traded fund, or ETF, focused on...

Related Searches

Check It Out

4 Credit Myths That Are Absolutely False

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!