Today, we will talk about WHEAT TRADING. It's not only to traders or investors trading or interesting in commodities, but also to most of us, WHEAT is not strange term any more. Yes, we know what is wheat, but how about wheat trading? Since there are still many facts about agricultural wheat or wheat trading that sound strange to us, even to traders in the floor, today we will discover the world of wheat. Despite you want to get more knowledge to talk to friends in conversations or to gain knowledge for your trading, the topic today "World Wheat Trading Facts" will bring you interesting and helpful time reading.
Because of the differences in wheat condition between regions to regions, like other kinds of trees, wheat cannot grow in all places in the world. It is produced in some special regions of the world that provide the proper growing conditions like North America, Eastern Europe, Russia, and Australia. Talking about this places where we can grow wheat, there will be an interesting thing. You might note about the coins? If not, you can look at one. You know, on the other side of the coins is the nations where lack the climate necessary for growing wheat. These discrepancies cause the world wheat trade, and the factors affecting the discrepancies show up in the price wheat is traded at.
Now, we will turn to check out the countries that keep the most influence on the whole markets. According to analysis since 1960, the global wheat trade has grown almost four times in size. In 2008, approximately 120 million metric tons (MMT) of wheat exchanged hands on the world market. Do you know who the leader in global exports is? I mean the leading seller on the global market. The United States is our answer. As reported, last year the U.S. accounted for 35 MMT of wheat exports. Surprisingly, that was almost 30% of the world's exports while Canada was a distant second in global exports at 16.6 MMT. Why we need to care about these numbers? It's important to understand conditions that effect crop producing regions in these areas as they consequently affect global supply and the price wheat is traded at. The importers of the world carry less market weight individually than the exporters.
To help you guys have a full view of the market, we will follow some examples or facts to see how the market has been going. Egypt, for example, the largest global importer of wheat, bought 7.7 MMT on the world market (about 6.6% of the world's imports). You may wonder why the importers are smaller in individual volume? The answer is because of the largest producers of wheat tend to be the largest consumers of wheat. Back before the age of fast and efficient global trade, the majority of food consumption came from domestic production. Thanks to time, this seems to become one of interesting parts in their culture: people had to eat what they grew. Areas that aren't historically known for wheat consumption aren't big consumers now, and that's why imports are more spread out than exports. Even though the importers carry less market weight individually than the exporters, their aggregate demand is equal to the aggregate export supply. To talk about this point will be a long story. But, for it is necessary, you should need to research more when trading wheat or commodity futures because both sides can affect the price wheat is traded at.
Another point that we should mention to is importers and exporters of wheat are some of the largest players on the wheat market. Therefore, it's important to keep an eye on domestic production and consumption. It's all about expectations. If these large users of the global wheat trade need to buy or sell significantly less/more than their original plans, it may cause market move. The news on this is so important to wheat traders and investors. Yes, how the market moves will affect on the prices and their profits. Because of the price information importance, it is updated daily. You'd better to keep track with not only wheat price but also silver price, gas price or other interactive futures market for your trading. Understanding the details of global supply and demand is imperative to becoming a wheat trader.
Article Source: http://www.articlesbase.com/day-trading-articles/wheat-market-world-wheat-facts-3477726.html
About the AuthorI'm a trader in futures trading floor. I'm always eager to learn and share. Reading and searching are my hobbies.