Key-Traded Agricultural Commodities

In this lesson, we’ll take a closer look at some of the key-traded agricultural commodities that dominate the U.S. and global markets, as well as offer some rationale for their heavy trading volumes.

Broadly speaking, the most heavily traded agricultural commodities are typically those that are:

• deeply woven into global supply chains,
• have diverse industrial uses, and
• undergo bouts of significant volatility.

For the financial markets, in general, high trading volumes basically equate to “high liquidity”, which effectively lowers the cost of entering and exiting trades and allows large institutions to move money efficiently. This high level of liquidity can also be very attractive to market participants engaged in hedging – to lock in prices in anticipation of potentially higher, future costs; these participants may also speculate about the direction of prices more generally. 

In the United States, for example, the most heavily traded agricultural commodities by volume include:

• Corn (ZC)
• Chicago SRW Wheat (ZW)
• Soybean (ZS)
• Live Cattle (LE)
• Lean Hogs (HE)

…while globally, they also cover:

• Coffee “C” Futures (KC)
• Cocoa Futures (CC)
• Sugar No. 11 Futures (SB)
• Cotton No. 2 Futures (CT)…

…mainly given their importance to both industrial and consumer markets.

But what makes these commodities so dominant on most of the major exchanges on which they trade – such as the Chicago Board of Trade (or “CBOT”), part of the Chicago Mercantile Exchange (or “CME Group”), as well as on ICE Futures U.S.?

The explanation basically boils down to three key components:

• global demand,
• economic significance, and
• price volatility.

Key-traded Agricultural Commodities – Details

Corn

As we addressed in our previous lesson, corn isn’t only a farm food product – it’s also used to produce industrial goods, such as biofuels, and serves as a key staple in products such as corn syrups, and animal feed. Indeed, the demand for corn is incredibly massive, which, in turn, makes it a highly liquid, and actively traded, commodity. For instance, companies across diverse sectors use corn as a manufacturing input, such as food and beverage giants Coca-Cola and PepsiCo, or agribusiness company Cargill, which might use it for ethanol, corn oil, starches, and other products, as well as multinational consumer goods company Procter & Gamble, chemical firm DuPont, and many more. 

Soybeans

Like corn, soybeans are commodities that are also widely consumed – and can play vital roles in everything from cooking oil to livestock feed. And soybeans have historically seen significant imports into countries like China. In 2024, for example, China imported a record of more than 105 million metric tons of soybeans – this was an increase of 6.5% over the prior year – and, according to Grainews, this was mainly driven, among other reasons, by factors such as a fall in prices, and strategic stockpiling ahead of anticipated trade tensions with the U.S.

Wheat

Wheat is another key-traded, soft commodity, where liquidity stems from the demand of several large country’s economies commonly using the staple in their food supplies, including for bread, pasta, cereals, and other wheat-based products. In terms of industry, major U.S.-based, global agribusiness companies, like Archer Daniels Midland (or “ADM”) and Bunge, can be financially affected by wheat prices, as well as consumer staples companies like General Mills and Kellogg’s that manufacture wheat-based products, among many other firms.

Livestock

Meanwhile, livestock commodities like live cattle and lean hogs are essential to the meat industry, and since they’re sensitive to factors like feed costs, disease outbreaks, and consumer demand—all of which may impact prices – they typically attract speculative trading. Not as obvious, but these commodities are also used in many industrial goods, further accounting for their high-volume trading activity.

For example, the bones, horns and / or hooves from live cattle are used to produce products like piano keys, buttons, and certain glues, as well as in pharmaceuticals like insulin, cortisone, and heart valve replacements, while lean hogs are used in industrial applications like certain cosmetics, plastics, floor waxes, and insecticides. Live cattle are also responsible for many goods in the textiles industry, such as leather to make coats, belts, shoes, and furniture – the use of tallow to produce conditioners and fabric softeners; as well as gelatin that’s used for coatings, and finishing – and much more.

Cocoa

On the global trading front, cocoa – the mainstay ingredient in chocolate, is also used to produce items such as chocolate scented candles, cocoa butter, and cocoa oil, which can be used in the fragrance, and skin care industries. This commodity also naturally sees high demand from food producers such as Hershey, Mondelez, Mars Wrigley, and Nestle, among others.

Cotton

There’s also cotton – which is most widely traded as the U.S. Number 2 Cotton contract – we’ll be exploring more about futures contracts in a later lesson – but for now, cotton is generally used by producers, the textile industry, and market speculators. This commodity is heavily imported globally, including by countries such as the U.S., China, Bangladesh, and Vietnam.

Coffee & Sugar

Then, there’s coffee and sugar – with Sugar Number 11, or “raw sugar”, as the most widely-traded futures contracts – these are grown primarily in emerging markets and consumed worldwide, which makes them prime targets for international trading activity. These products also tend to be seasonal, and their prices can be highly impacted by weather, disease, geopolitical instability, and shifting trade policies—the potential for any and all of which to add to their trading volume, as well as volatility.

A Brief Look at Some Catalysts

We’ll be diving more deeply into some of the major risks to agricultural commodities in a later lesson, but for now, we can say that catalysts like droughts, floods, and government policy changes can trigger price swings in the agricultural commodities markets – while the ensuing volatility can create opportunities for traders on the one hand – and risks for producers and consumers alike on the other, which is where hedging strategies can become critical.

Here’s an example:

In 2025, the global coffee market experienced significant volatility, driven by a combination of supply disruptions, shifting demand, and geopolitical tensions.​

On the supply-side, Brazil – one of the largest global producers of arabica coffee beans – saw its yields affected by severe drought conditions, while, at the same time, worldwide demand for the commodity was up, with notable increases in countries like China, adding pressure on the already tight supply.​ And compounding these supply-demand dynamics, U.S.-imposed tariffs on imports, including coffee, further put a strain on supply chains, which contributed to price increases and market uncertainty.

It’s not surprising then that, with all this volatility, the prices of arabica coffee futures soared to a record high in February of 2025, about double that of the previous year.

And those higher costs meant that companies that rely on the commodity like Starbucks, KDP, J.M. Smucker – owner of Folgers coffee, and Kraft Heinz – maker of Maxwell House, along with many others, likely faced, or will face, some financial challenges, including on their product margins, as well as their costs to consumers.

So, you can already start to see how the agricultural commodity ecosystem functions – and how manufacturing and consumer costs can be influenced by global supply, demand, and associated risks.

Learn More

IBKR Podcasts

When Trade Wars Hit the Farm… Who Gets Plowed Under?

Lean Hog Futures – Is Anyone Bringing Home the Bacon?

Live Cattle Futures – Herd Around the World

Sugar Futures – Talk About a Cereal Killer

‘Cuckoo’ for Cocoa Futures?

Eyepopping Corn Prices – Fueling Food Inflation

The War on Wheat – How Much Bread Is on The Table?

Time for a Coffee Break?

Traders’ Academy

Introduction to Grains and Oilseeds

Understanding South American Soybean Futures

Hedging with Grain and Oilseed Futures and Options

Traders’ Insight

Corn Sustainability in the United States

Navigating the U.S. Planting Season with Enhanced Risk Management

A Brewing Storm for Arabica Coffee

How Commodity Prices Impact Inflation

Explore CME Market Pulse for in-depth details on agricultural futures contracts, including corn, soybeans, Chicago wheat, live cattle, and more! This tool offers timely, AI-powered insights into futures markets, providing updates daily, including settlement prices, daily changes, highs and lows, and year-over-year comparisons – helping traders to make more informed decisions by highlighting significant market movements and trends.