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About
History
Differences between Investing vs Trading
About
History
Differences between Investing vs Trading
Wheat is one of the world’s most commonly traded commodities. It is used in a variety of products, from bread and pasta to beer, ethanol and animal feed. The trade of wheat involves a complex network of farmers, traders, processors, shippers, brokers and consumers who interact in global markets.
For centuries, wheat has been an important part of the global economy. It is one of the oldest and most widely grown crops, with thousands of varieties cultivated around the world. In fact, wheat accounts for more than 20 percent of all calories consumed by humans globally. Wheat’s trading history dates back to ancient Egypt, where it was used as currency. Today, wheat is traded all over the world on stock exchanges and in futures markets. Prices are influenced by factors such as weather conditions, export policies, crop yields, agricultural subsidies and more.
Wheat prices have fluctuated throughout history, depending on a variety of different factors. Over the past century, the highest price for wheat was seen in 2022 when it reached $457.38 per bushel. Prices then plummeted to as low as $166.99 per bushel in 2008, during the economy downtime. In recent years, changes in global politics, drought and other factors have had a significant impact on wheat prices.
For instance, in 2012, Russian exports of wheat were banned after a severe drought caused crop yields to plummet and the price of wheat skyrocketed. In 2017, the U.S. imposed tariffs on imports from China, which caused wheat prices to rise again due to reduced supply and increased demand for domestic wheat. Although the current price fluctuates on a daily basis, it remains generally stable as global markets adjust to these changes in policy and weather conditions. Wheat prices continue to be an important factor in the agricultural industry and will likely remain so for many years to come.
When it comes to trading wheat, one of the main differences between CFDs and investing in the actual commodity is the leverage that you get with CFDs. With a CFD, you can control much larger amounts of wheat than you would be able to do if you just invested directly in the physical commodity. This means that you can make bigger profits with a smaller amount of capital.
However, it also means that your potential losses are amplified as well and you can lose more than what you initially invested if the market moves against you. Another difference is that when trading wheat CFDs, there is no need to store the physical asset unlike in traditional investing where storage costs may be incurred.
| Swap long | [[ data.swapLong ]] points |
|---|---|
| Swap short | [[ data.swapShort ]] points |
| Spread min | [[ data.stats.minSpread ]] |
| Spread avg | [[ data.stats.avgSpread ]] |
| Min contract size | [[ data.minVolume ]] |
| Min step size | [[ data.stepVolume ]] |
| Commission and Swap | Commission and Swap |
| Leverage | Leverage |
| Trading Hours | Trading Hours |
* The spreads provided are a reflection of the time-weighted average. Though Skilling attempts to provide competitive spreads during all trading hours, clients should note that these may vary and are susceptible to underlying market conditions. The above is provided for indicative purposes only. Clients are advised to check important news announcements on our Economic Calendar, which may result in the widening of spreads, amongst other instances.
The above spreads are applicable under normal trading conditions. Skilling has the right to amend the above spreads according to market conditions as per the 'Terms and Conditions'.
Trade [[data.name]] with Skilling
Take a view on the commodity sector! Diversify with a single position.
- Trade 24/5
- Tight spreads
- Average Execution at 5ms
- Easy to use platform
FAQs
What affects Wheat prices?
Wheat prices are affected by a number of factors, including global supply and demand, weather conditions, government policies, trade agreements, and geopolitical events. For example, the severe drought of 2012-2013 in the United States caused wheat prices to skyrocket due to decreased yields. That year marked one of the worst harvests in U.S. history, with prices rising over 60% in some areas.
On the other hand, a bumper crop in Russia in 2020 caused wheat prices to fall due to increased global supply. The United Kingdom’s Brexit vote also had an impact on wheat prices, as it created uncertainty among traders and led to increased demand for safe-haven assets such as wheat. It is important to stay informed of such news and events as they can have a substantial impact on wheat prices, so it pays to be a savvy trader!
How to trade Wheat CFD?
Wheat CFDs are an exciting way of profiting from the fluctuating prices of wheat. However, as with any type of trading, there are certain things to take note of before entering into a trade. Here are some important considerations when trading Wheat CFDs:
1. Monitor news and supply/demand levels – While wheat is a relatively stable commodity, its price can be impacted by news events and supply/demand levels. It is important to closely monitor these factors in order to make informed trading decisions.
2. Choose a reputable broker – Choosing a broker like Skilling to trading Wheat CFDs. Ensure that your chosen broker offers competitive spreads, low commissions and reliable executions.
3. Utilize risk management strategies – Wheat CFDs can be volatile and risky, so it is important to use risk management strategies such as stopping losses and limits in order to protect your capital.
4. Take advantage of leverage – Leverage can help traders increase their exposure to the markets with minimal amounts of capital. However, it is important to use leverage responsibly and ensure that you understand the risks associated with trading on margin.
By understanding the different aspects of Wheat CFD trading and utilizing the right strategies, traders could increase their chances of success when investing in this asset class.
What are the other options for trading Wheat?
Apart from trading Wheat, there are other options to consider. For instance, multinational companies that highly depend on Wheat can be an interesting option for traders. These multinational companies may include agricultural commodity producers and processors such as food and beverage giants like General Mills and Kraft Heinz.
Trading in these products enables traders to gain exposure to the Wheat market, as well as leverage the potential of price movements in these companies. Trading in these multinational companies also provides a great opportunity for traders to research the underlying fundamentals and make informed decisions when trading. Additionally, traders can diversify their portfolios by trading in other agricultural commodities such as Corn, Soybeans, Cotton, and Rice.
Why Trade [[data.name]]
Make the most of price fluctuations - no matter what direction the price swings and without the restrictions that come with owning the underlying asset.
CFD
Actual Commodities
Capitalise on rising prices (go long)
Capitalise on falling prices (go short)
Trade with leverage
Trade on volatility
No commissions
Just low spreads
Manage risk with in-platform tools
Ability to set take profit and stop loss levels
