Trading Soft Commodity CFDs

Soft commodities are a subset of commodities that include agricultural products or primary products that are grown rather than mined. These include items like wheat, soybeans, corn, coffee, cocoa, sugar, cotton, and more. Soft commodity trading allows investors to speculate on the price movements of these agricultural products without physically owning them. One popular way to trade soft commodities is through Contracts for Difference (CFDs).

What are CFDs?

Contracts for Difference (CFDs) are financial derivatives that enable traders to speculate on the price movements of an underlying asset without owning the asset itself. CFD trading is done through a contract between the trader and the broker, and it allows traders to profit from both rising and falling markets.

Trading Soft Commodities with GO Markets

Trade with leverage

Commodities are traded on margin – choose your preferred leverage up to a 20:1

Competitive spreads

We give you tight, competitive spreads across our full range of commodities

Fast trade execution

Low latency and efficient price feeds mean you enjoy quick trade execution

Lower trading cost

Compared to other instruments commodities attract a much lower cost, so you trade with less expense

Trade across devices

Our mobile MT4 & MT5 trading platforms allow commodity trading across your preferred devices

Trade long and short

You can take long or short positions on commodities as you only trade the price movements

Why Trade Soft Commodity CFDs?

  • Diversification: Soft commodities provide diversification opportunities for traders looking to balance their portfolios. Their prices are often influenced by different factors compared to traditional financial instruments, offering a hedge against market volatility.
  • Leverage: CFDs allow traders to access leverage, which means they can control larger positions with a smaller initial investment. However, traders should be cautious, as leverage magnifies both profits and losses.
  • Liquidity: Major soft commodity CFDs generally have good liquidity, ensuring ease of execution and tighter spreads.
  • Short Selling: CFDs enable traders to profit from falling prices by short selling, which is a significant advantage in a declining market.
  • No Physical Ownership: Traders do not need to handle or store the physical commodities, making CFD trading a more convenient option.

How Soft Commodity CFD Trading Works:

  1. Understanding the Market: Thoroughly research the soft commodity market. Study the factors influencing supply and demand, as well as the impact of geopolitical events, weather conditions, and economic indicators.
  2. Open a trading account with GO Markets. We also suggest opening a demo account; a demo account offers a risk-free environment to test trading strategies and get acquainted with the trading platform.
  3. Analysis and Strategy: Develop a trading strategy based on fundamental and/or technical analysis. Fundamental analysis focuses on supply and demand factors, while technical analysis uses historical price data and chart patterns to identify potential entry and exit points.
  4. Risk Management: Trading soft commodity CFDs carrys risk. Traders can set stop-loss and take-profit levels to limit potential losses and secure profits.
  5. Placing Trades: Use one of our trading platform options to execute your trades. Decide on the trade size, select the soft commodity CFD you wish to trade, and choose whether to go long (buy) or short (sell).
  6. Monitoring and Adjusting: Keep a close eye on your positions and the market. Be prepared to adjust your strategy based on changing market conditions.
  7. Closing Trades: When you’re ready to exit a trade, close the position through the trading platform. Your profit or loss will be realized at this point.

Factors Influencing Soft Commodity Prices:

Several factors impact soft commodity prices, including:

  • Weather Conditions: Extreme weather events, such as droughts, floods, or hurricanes, can significantly affect crop yields and supply.
  • Global Demand and Supply: Changes in population growth and economic conditions can influence the demand for soft commodities.
  • Government Policies: Agricultural subsidies, trade restrictions, and regulations imposed by governments can impact commodity prices.
  • Currency Fluctuations: As soft commodities are often traded in USD, changes in exchange rates can affect their prices.
  • Geopolitical Events: Political instability, conflicts, and trade wars can disrupt commodity markets.
  • Commodity Reports and Data: Official reports on crop planting, harvests, and inventory levels can influence market sentiment.

Trading soft commodity CFDs can be a rewarding endeavour for investors interested in agricultural markets. However, like any trading activity, traders must approach it with a well-thought-out strategy and sound risk management practices. Stay informed about global events and market trends to make informed decisions, and continuously improve your trading skills through education and experience.

Range of Commodities

All Instruments

All Instruments

Below is the range of commodity CFDs you can trade via our MetaTrader 4 or MetaTrader 5 trading platforms:

InstrumentSymbolSpreadLot SizeTrading Hours (Platform time)
Soybean FuturesSBEAN-FVariable10,000 bushels03:00-15:45,16:30-21:20
Wheat FuturesWHEAT-FVariable10,000 bushels03:00-15:45,16:30-21:20

Integrated platform power

MetaTrader 4

A popular platform with new and expert traders for trading Forex, analysing markets and using EAs.

Learn more

MetaTrader 5

This powerful multi-asset platform lets you trade Forex, Shares and Futures as CFDs.

Learn more

GO trading in just a few steps

1. Confirm your identity

In just minutes we can verify your identity and create your account.

2. Fund account

Deposit funds to your trading account.

3. Place your trade

Take a position in your choice of instrument.