Agricultural Commodities are used in reference to basic agricultural products that are either in their original form or have undergone only primary processing such as crops and livestock that are raised and harvested to provide food and sometimes fuel. The following is a rundown of the most profitable agricultural commodities to invest. Let's review each of them.
Corn is considered as a commodity pool, an investment vehicle that pools investors’ assets to invest in futures contracts as it is used as feed, fuel, starch, sweetener, and even plastic. Corn plays an important role in the global economy, with USA being the leading producer of 370 million tones from 36 million hectares (harvested 33.08 million hectares in 2017), which accounts for over one-third of the global corn production. Out of this, more than 92% is GM corn. Currently, with global production of 1.06 billion tones from 187 million hectares, it is second to sugarcane and in global trade, it is the second most traded agricultural commodity after wheat.
Wheat is a key global commodity in terms of acreage and tradeable value and as a staple in household diets. Not only is wheat used for animal feed, but also in the production of flour for breads, pastas, and more. In summary, benefits from having wheat in the crop rotation include improving soil quality, cycling nutrients and providing nitrogen credit, breaking the cycle of annual and perennial weeds, protecting soil from soil erosion, distributing farming operations and providing a good return on investments. Referring Expert Market Research analysis, the global wheat market attained a consumption volume of nearly 734.7 million metric tons in 2020. It is expected to witness a further growth in the forecast period of 2022-2027, growing at a CAGR of 2.7%. The industry is projected to reach a consumption volume of around 861.5 million metric tons by 2026.
Oat production takes place in diverse countries across the globe. The importance of the crop as both a source of animal feed and a highly nutritious food for humans ensures it will remain a leading global commodity. Furthermore, oats have many health benefits for humans such as: contains high soluble fibers, has anti-inflammatory properties as well as being the best amino acid balancing of all cereal grains. One of the advantages of growing this commodity is that the crop does not require intensive maintenance. Referring Fortune Business Insights analysis, the global oats market size stood at USD 5.18 billion in 2019 and is projected to reach USD 6.90 billion by 2027, exhibiting a CAGR of 3.8% during the forecast period (2020-2027).
Soybean is an excellent source of protein which are also used to create many other food products, such as tofu, tempeh, shoyu, miso, and soy milk. Soybeans, and products derived from soybeans, are important commodities in today’s global marketplace. The global market for soy has been rising steadily for the past few years and there are a few reasons for traders to have a positive outlook on the soybean market in the years to come.
Transparency Market Research predicts that the value of the global soybean market will grow from $146.23 billion to $215.746 billion between 2017 and 2025.
Extra Virgin Olive Oi
It is one of the most important soft commodities, with prices being driven by supply. Virgin olive oils are those that have not been synthetically treated. In other words, this type of olive oil is produced using only the processes of centrifugation (to extract the oil), decantation (to pour the oil without disturbing) and filtration. Demand for extra-virgin olive oil has increased over the past five years, as consumers become more aware of its health benefits. IBISWorld forecasts that in 2021, extra-virgin olive oil is expected to account for 52.3% of Olive Oil Production industry revenue. Publicizing olive oil's health benefits will continue to provide an opportunity for this commodity. New studies continue bringing to light the product's health benefits. Olive oil has been found to boost the immune system, protect against viruses and fight diseases like cancer, heart disease, diabetes, high blood pressure, obesity, rheumatoid arthritis and osteoporosis. Additionally, according to the American Academy of Neurology, older individuals who consume olive oil daily may be able to protect themselves from a stroke. The IOC states that the industry's short-term priority will be to get existing consumers of olive oil to use more, while the longer-term goal will be to encourage new consumers to use olive oil. These new studies will likely cause consumers to purchase more olive oil, boosting industry demand and revenue. Likewise, profit is expected to grow over the next five years.
Potatoes have become popular due to their long shelf-life. In the processed food industry, where processed products constitute the bulk of potato consumption, the demand for fresh potatoes has skyrocketed across the globe. According to the International Trade Map in 2019, the Netherlands, China, France, Germany, and the United States are the major exporters of fresh potatoes worldwide. The increased demand from the processing industry, along with consumer demand, is boosting its production globally. The potato market is projected to record a compound annual growth rate (CAGR) of 1.0% during the forecast period, 2021-2026. The COVID-19 pandemic has driven the demand for fresh potatoes in supermarkets and grocery stores across the globe, as people stock up on inexpensive food due to panic buying. The lockdown has also increased the demand for fresh potatoes in developing countries.
Rice plays a pivotal role for the food security of over half the world population. It is also a central component of the culture of a number of communities. Therefore, rice is considered as a “strategic” commodity in many countries, both developed and developing. It is noteworthy that rice is a major source of energy and an important one of protein: 100 grams of raw white rice provide 361 kcal and 6 grams of protein. It also contains substantial amounts of zinc and niacin. USDA forecasts that in the global rice market, production in 2021/22 is forecast at a record 511.7 million tons (milled basis), up 1.0 million tons from the previous forecast and 4.4 million tons larger than a year earlier.