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What Are Agricultural Commodities?
Agricultural commodities are staple crops and animals produced or raised on farms or plantations. Most agricultural commodities such as grains, livestock, and dairy provide a source of food for people and animals across the globe.
Main Uses Of Agricultural Commodities
However, some agricultural commodities have purely industrial applications. The building and furniture industries use lumber from trees, while manufacturers in several sectors use latex from the rubber tree. Wool from sheep provides the fabric for the clothing industry and lanolin for skin- and hair-care products. Some agricultural commodities serve as both a source of food and an industrial ingredient. Both humans and animals consume corn, but the commodity is also an important ingredient in fuel production. Similarly, humans eat the beef of cows, while a variety of industries use beef hide, fats, and bones to create products.
Why Are Agricultural Commodities Important?
Virtually every living being on the planet depends on the agricultural industry in one way or another. We eat the grains, fruits, vegetables, and livestock that farmers produce; build the frames of our houses from lumber; make clothes from cotton and wool; and ride in cars with tires made from rubber. Also, over 1.3 billion people – nearly 20% of the global population – work in farming. In some regions of the world, such as South Asia and Sub-Saharan Africa, farming employs more people than any other industry.
The global impact of the agricultural industry is enormous. According to the Food and Agricultural Organization of the United Nations, the economic value of the agriculture industry, in constant 2010 dollars, is more than $3 trillion. With the world population expected to climb from 7.5 billion to 11.8 billion by 2100, agricultural commodities are likely to play an even bigger role in the decades ahead.
Agricultural commodities fall into six categories: Cereal Grains, Oilseeds, Meat, Dairy, Other Soft Commodities,and Miscellaneous Agricultural Commodities.
Here’s a summary of agricultural commodities and what exchanges they are traded on:
Commodity Primary Uses* Contract Size Futures Exchange
Wheat FA, FP 5,000 bushels Chicago Board of Trade (CBOT)
Corn FA,FP, FF 5,000 bushels Chicago Board of Trade (CBOT)
Oats FA,FP 5,000 bushels Chicago Board of Trade (CBOT)
Barley FA,FP 20 metric tons Intercontinental Exchange (ICE)
Rough Rice FP, FF 2,000 hundredweights Chicago Board of Trade (CBOT)
Cotton FA, OL 50,000 pounds New York Mercantile Exchange (NYMEX) / Intercontinental Exchange (ICE)
Palm Oil FA, FP, FF, OL 25 metric tons Chicago Mercantile Exchange (CME)
Soybeans FA, FP, OL 5,000 bushels Chicago Board of Trade (CBOT)
Feeder Cattle FP 50,000 pounds Chicago Mercantile Exchange (CME)
Lean Hogs FP 40,000 pounds Chicago Mercantile Exchange (CME)
Live Cattle FP 40,000 pounds Chicago Mercantile Exchange (CME)
Pork Bellies FP N/A N/A
Cocoa FP 10 metric tons New York Mercantile Exchange (NYMEX) / Intercontinental Exchange (ICE)
Coffee FP 37,500 pounds New York Mercantile Exchange (NYMEX) / Intercontinental Exchange (ICE)
FCOJ FP 15,000 pounds Intercontinental Exchange (ICE)
Sugar FP, FF 112,000 pounds New York Mercantile Exchange (NYMEX) / Intercontinental Exchange (ICE)
Lumber IU 110,000 board feet Chicago Mercantile Exchange (CME)
Rubber IU 5 and 10 metric tons Tokyo Commodity Exchange (TOCOM) / Shanghai Futures Exchange (SHFE)
Wool IU 2,500 kilograms Australian Stock Exchange (ASX)
*Legend for Primary Uses in the table above:
FA = Food source for animals
FP = Food or beverage source for people
FF = Feedstock for fuel production
OL = Food and/or industrial oil or lubricant
IU = Industrial uses
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