How to trade barley online

The grain trading market has been around for thousands of years. Use our beginner’s guide to find out how it works and where you can start trading barley.
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Updated: Jul 19, 2022

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This guide looks at the barley trade and how you can get involved. Find out what makes the market move, how it’s performed in the recent past, and the different trading options available to you.

Compare the best platforms for trading barley

If you want to trade barley right away, use one of the brokers below. They have been chosen by our team of experts based on their experience of reviewing all the best options out there. If you don’t want to trade just yet, read on to learn more.

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How to trade barley online – a step-by-step guide

Commodities trading is quite a simple process once you understand how to do it. You can follow this step-by-step guide to get started with trading grains like barley.

  1. Find a broker. There are lots of brokers out there and each offers slightly different features at a different price point. You can use our table above to help you choose one.
  2. Create an account. You have to create an account to start trading. To do so you’ll have to provide some contact details and verify your identity with a form of photo ID.
  3. Deposit funds. Brokers usually accept deposits via bank transfer or using a credit or debit card. If you want to use a different method, like PayPal, you might have to check with your broker directly.
  4. Decide whether to go long or short. This is the basics of trading: if you think barley is going to go up in price, you should go long, if you think it’s going to go down, then go short.
  5. Execute trade. Finally, you just need to navigate to the barley trading page with your broker and execute the trade.
  6. Set stops and limits (optional). Stop-loss limits are a good way to reduce your risk by putting in an automatic order to close the trade whenever the price goes below a certain point. It’s usually a good idea to do this if you aren’t going to be monitoring the market all the time.

What is barley? And why does it have value?

Barley is a grain that forms the basis for lots of foods for both animals and humans. As well as things like livestock feed, cereals, and healthy foods, barley serves perhaps its most critical function as an ingredient that goes into making beer.

Barley is cheap, has two growing seasons a year, and grows relatively quickly, which is lucky because of how important it is to the economy as a source of food. Traders tend to use barley as a way of hedging against the value of the US dollar, or simply as a means of speculation.

What affects the price of barley?

There are lots of factors, the most important of which are the amount of global production, and demand from new and emerging markets. Production is perhaps the biggest factor, as it can be affected by things like weather conditions, government subsidies, and shifting consumer demand.

Something to be aware of is that the prices of barley, corn, and wheat tend to be closely correlated. They are easily interchangeable in foods and farmers can alternate between them as well. The rise in price of one in the supermarket is likely to eventually cause a move towards the others, as demand rises for a cheaper alternative.

How has barley performed in recent years?

The barley price has been pretty stable on the whole but it is very seasonal, with prices peaking in June and July of each year going back to 2016. More demand is coming from emerging markets in Asia in particular, but so far the supply has held up to keep prices in check.

Supply can be fragile, however. In 2012, weather disasters in Canada, Australia, and Russia – three of the biggest barley producers – damaged the crops and sent prices soaring up to $260/ton, its highest price for more than 30 years. Grain prices at that level are no good to anyone, so it quickly fell back again and has been around half that ever since.

Should I start trading barley now?

If you are an experienced commodities trader, you might see potential in barley thanks to its volatile prices and importance to the global economy. New traders might want to consider beginning with something like oil, which is more popular and much easier to get started with.

The grain trade tends to be the preserve of experts, who understand the intricacies of planting and harvesting seasons and can predict what might cause a shortage or a surplus. If you need a bit of help to do this yourself, use our market analysis as a starting point:

Trading barley for beginners

If you’re new to commodities trading, make sure you do your research before you put any money on the line. Below we’ve put together a list of things to do before you start, and noted all the different trading options you have once you do.

What to do before starting to trade

Success starts long before you place your first trade. This is a guide to all the things you need to be familiar with before you invest in Barley.

  1. Research the commodity. You need to understand what makes barley valuable and the factors that affect its price. That means knowing about the relationship between the different grains, and the sort of things to look out for that might cause a price shock down the line.
  2. Make sure you understand the basics of commodities trading. Commodities trading is a bit different to trading stocks or cryptocurrencies. Most of barley trading is done via futures contracts or CFDs, so work out the sort of trader you want to be before you start.
  3. Decide between long term and short term trading. Decide how soon you want to see returns because that influences how you should trade. Trading tends to be a short term game, but there are ways to invest in barley for the long term using stocks and funds as well.
  4. Set a budget. The golden rule is to never risk more than you can afford to lose. Set a budget in advance so that you aren’t tempted to keep putting more and more money in.
  5. Find a broker platform. The last thing you need to do is to find somewhere to place your trades. Choose one that best fits the style you’ve chosen having gone through all the rest of the steps first.

The different ways to trade barley

There are many different ways to trade commodities. Take a read through all the options below to familiarise yourself with them, so that you can then make the best decision for your style and budget.

  • Barley spot trading. The ‘spot’ price is how much it costs right now. Spot trading generally means using CFDs to speculate on price changes instead of owning the grain itself. A CFD is a contract where the buyer agrees to pay the seller the difference between the price today and the price when the contract expires, so they are a popular way to get involved in volatile markets.
  • Barley futures. A futures contract is a fixed agreement to buy barley at a set date in the future, for a price agreed today. Futures are another popular way to trade commodities, because you can speculate on what the price will be in a few months’ time.
  • Options contracts. Options are like futures, except they give you the opportunity to buy on a set date in the future, rather than the obligation. The two types of options are ‘calls’ and ‘puts’, which are predictions that the price is going to go up and down, respectively.
  • Spread betting. Spread betting is a means of predicting that the market is going to move up or down. You stake a set amount per ‘point’ of movement, and earn that stake back for each point the market goes in the direction you predicted. You also lose your stake for every point the other way, so be careful.
  • Barley stocks. Buying shares in companies that are involved in farming, producing, or transporting barley can be the best way to invest if you want to grow your wealth over time. These stocks are often less volatile than the grain price and require less management than trading futures or CFDs.
  • Barley ETFs. An exchange-traded fund is a publicly-traded fund that owns a portfolio of stocks from a particular industry. You can find agriculture or grain ETFs that would own stocks in companies involved in the barley trade, and these are even easier to buy and own than the stocks themselves. Just note that you will have to pay a small fee each year in maintenance costs.

You can learn more about the different ways to trade commodities with our educational courses. Otherwise, start trading barley right away by signing up to an online broker.

Latest barley news

After a see-sawing two months of intense discussions, negotiators from Russia, Ukraine, Turkey and the United Nations have finally broken ground on a much-awaited joint agreement to facilitate grain exports through the Black Sea. Both countries are systemically important to the global agricultural trade. According to the Food and Agriculture…
Corn price is trading at its lowest level in about six weeks. Improved pace of planting and waivers related to the summer gasoline blend are the key bearish drivers. corn price Fundamentals In the WASDE Report released earlier in May, the US Department of Agriculture (USDA) lowered its outlook…
Coffee price has been trading above the psychologically crucial level of $200 cents/lb since November 2021 as demand for the agricultural commodity strengthens. Even so, it is yet to hit the pre-pandemic levels. The predicted surplus, coupled with eased concerns over frost in Brazil are the key bearish drivers. What’s…
India’s decision to ban wheat exports has come amid a deepening food crisis. Severe bottlenecks have plagued the global agricultural supply chain for years, even pre-dating the pandemic. High fuel prices, swine flu, El Nino, increased government stocking, and biofuel demand contributed to food inflation. Important producers such as…
Sugar price has extended its losses to trade past the psychological level of $19.00 cents per pound to $18.72 as at 11:36 a.m GMT. A weaker Brazilian Real is the key bearish driver in the market. Even so, high ethanol demand may sustain the ICE futures above the support level…
Corn price has pulled back from the 9-year high of $8.20 per bushel  it hit at the beginning of the week with the market in a profit-taking mode. Even so, CBOT futures are still holding steady above $8.00. Prior to this week, the commodity had not reached that level since…

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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.