Who Trades Agriculture and How?

The agricultural commodity markets are highly complex, involving farmers, ranchers, processors, distributors, packagers, wholesalers and retailers. They use CME futures and options to manage risks such as extreme weather, disease, natural catastrophes and government policies. Day traders, position traders and institutions also trade in these markets, assuming the other side of price fluctuation risk.

CME Group commodity products offer a way to manage these risks. For example, a cattle rancher may be concerned about lower prices at the time his animals will be ready to bring to market. That rancher can calculate the cash price he needs for his livestock and sell CME Group live cattle futures to ensure his profitability despite declines in the market price for his herd.

CME Group commodity and agricultural products help commercial interests, producers, processors and others to manage the constant commodities price risk they face

A rancher tends his cattle

The markets offer opportunities for investors that wish to profit from price fluctuations. The price risks stem from numerous sources: weather, disease, governmental policies, political decisions, wars, fuel costs and the value of the US dollar also add to the uncertainty in these markets