How to trade & invest in barley for beginners 2024

Learn how to make your first barley investment and get practical tips for both short-term barley trading, and how to invest in barley long-term.
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Updated: Jan 8, 2024
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In this guide, we explore the foundational aspects of barley investments, from the factors that drive barley prices to the various investment vehicles available, such as spot markets, futures contracts, stocks of barley companies, and exchange-traded funds (ETFs).

Can I invest in barley?

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Yes, investing in barley is straightforward and available to anyone using an online trading platform. Investing in barley and trading barley represent different approaches with varying time horizons. 

Barley investing involves a long-term perspective with the main aim of growth and diversification. barley trading, on the other hand, focuses on short-term price movements for quick gains. 

You can invest or trade barley through many different avenues, including barley futures, barley exchange traded funds, or CFDs. To decide on the best approach, you will need to consider your goals and time horizon before aligning your strategy with your specific objectives. 

Where can I trade barley online?

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Before you invest in barley you’ll need to register with an online broker. Our experts have selected some of the top barley trading platforms. Check out any of the links below to get started in just a few minutes.

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1
Min. Deposit
$ 100
Best offer
User Score
9.9
Up to $240 bonus!
Award-winning trading platform
Regulated and trusted broker worldwide
Start Trading
Payment Methods:
Bank Transfer, Debit Card, PayPal, Credit Card, Wire Transfer
Full Regulations:
CySEC, FCA

eToro offers real assets only, no CFD products. Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.

2
Min. Deposit
$ 100
Best offer
User Score
9.9
Trade +2000 CFDs on Shares, Forex, Indices, Crypto, Options, Commodities & more
Unlimited risk-free Demo Account
0 commissions & attractive spreads
Start Trading
Payment Methods:
Bank Transfer, Debit Card, PayPal, Credit Card, Visa, Mastercard, American Express, Trustly, Apple Pay, Google Pay, Discover, Bank Transfer: SEPA, Bank Transfer: FPS, skrill
Full Regulations:
ASIC, FCA, FSA, MAS, CySEC #250/14

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3
Min. Deposit
$ 0
Best offer
User Score
9.9
Provides educational content on options trading, including strategies and risk management.
Cover futures contracts tied to commodities like oil, gold, and agricultural products.
Analyzes commodity markets, discussing supply and demand dynamics and seasonal trends
Start Trading
Payment Methods:
Wire Transfer, Check, ACH
Full Regulations:

What is barley investing?

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Barley investing gives investors a unique avenue for portfolio diversification and capital growth. As an investment, barley can serve multiple purposes. 

Many investors use barley as a store of value, as a way to hedge against inflation, or for diversification. Barley’s historically low correlation with other assets like stocks and bonds makes it a top choice for investors looking to reduce overall risk. 

Although barley prices can fluctuate in the short term, investors generally focus on the potential for steady and long term growth. This long term focus is what differentiates barley investors from traders. When trading barley, you are more interested in short term price fluctuations than long term performance. Before taking the first step, it’s important to learn how to invest in barley and understand market dynamics. 

What is barley trading?

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Barley trading can take many forms. Speculators, or retail traders capitalise on short term price fluctuations to earn profits. Producers or other entities involved in the barley industry can use trading strategies to hedge against future price changes and ensure safety for their business operations. 

Long term investors look to hold positions for extended periods to profit from barley’s future growth. Futures contracts, spot markets, options, and various derivative instruments are standard methods for trading barley. In the following sections, we’ve explained the different ways you can trade barley so you can find the most suitable method. 

Ways to invest in barley

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There are several options available when it comes to investing in barley and the one you should pick depends on your budget, experience, and the timeframe for seeing returns. Here’s a look at the various ways you can invest in barley.

  • Invest in barley stocks. Perhaps the simplest way of gaining exposure to barley is by investing in public companies that are involved in the barley industry. The share price of these companies will correlate somewhat with the price of barley. You will mainly be looking at companies such as manufacturers, producers, and sellers. 
  • Invest in barley ETFs. Exchange traded funds (ETFs) are funds that trade on the stock exchange like any ordinary stock; however, they contain a selection of different stocks, providing a diversified blend for investors. You can also invest in barley commodity ETFs, which are funds that have their value pegged to physical barley. Our guide on the best agriculture ETFs has a selection of funds to invest in. 
  • Invest in barley funds. Mutual funds are created when capital from many different investors is pooled together and a fund manager takes control, using their expertise to decide what barley assets to invest in and when to sell them. This can be a great way of investing in barley without the strain on your own knowledge and experience. There are no funds specifically focused on barley, however many exist for the agricultural sector. 
  • Trade barley futures. Futures contracts are the most common way to speculate on short term price changes. They are an agreement to make a trade at a future date for a pre-agreed price. barley futures contracts require a detailed understanding of what impacts short term prices and are most suited to someone with experience in the market.
  • Trade barley CFDs. Contracts for Difference (CFDs) are a popular way to speculate on barley price movements without having to own the physical asset itself. This makes them ideal for commodity trading, where it’s not practical to own and store large quantities of barley. With CFDs, you can profit from both rising and falling prices. CFDs also offer leverage, which can amplify your exposure to barley markets. 
  • Trade barley options. Options let you buy or sell barley contracts at a predetermined price on or before a specific future date. barley options trading requires some expertise but allows traders to capitalise on price changes and manage risk, which makes it popular with people familiar with the barley market.

How to invest in barley – a step-by-step guide

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Investing in barley is a simple process. Before you begin, you’ll need to register with an online broker to access the barley market. Follow the steps below to learn how to invest in barley. 

Step 1. Define your investment timeline

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You should clarify your investment objectives as the first step. Are you seeking long-term capital growth, portfolio diversification, or short-term speculation? Your investment timeline will influence your barley investment strategy. 

Step 2. Open a barley trading account

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Choose an online broker that offers the barley market. We recommend eToro as the best barley trading platform. It has one of the widest selections of derivatives available, so you’ll find multiple ways to invest in barley. 

Step 3. Choose your investment vehicle

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You can invest in barley in many ways. Use our guide above to help you decide which option is most suitable for you. Once you’ve selected, search for your chosen investment using your broker’s search feature. 

Step 4. Analyse the barley market

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Before investing, take the time to analyse the barley market thoroughly. You can look at factors such as supply and demand dynamics, geopolitical events, and technical analysis. You can use your analysis to help develop an investment or trading strategy. 

Step 5. Make your investment

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It’s time to place your trade when you’ve completed your research and defined your strategy. Search for the market you want to invest in and visit its trading page while logging into your brokerage account. 

Check its price and enter your trade details. You can click buy if you’re investing in barley stocks or funds. If you’re trading barley using CFDs or futures, consider including a stop loss and take profit level to help protect your position. 

Step 6. Monitor your investment portfolio

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Regularly review your portfolio and its performance. You may want to consider making changes if necessary and be prepared to adjust your strategy as the barley market conditions change. 

Choose a barley trading platform

What to consider before making a barley investment

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When investing in barley, it’s important to approach with a well thought out strategy. Considering a range of factors before investing can save you time and money in the long run. Use the helpful tips below to plan your barley trading or investing strategy. 

What are your investment goals?

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Before you begin, you should clearly define your investment objectives. Are you seeking quick gains, long term wealth appreciation, or steady income? Knowing your goals before you start can help guide you in your strategy and also which barley derivative to use. 

Does barley suit your risk tolerance?

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Commodities like barley often experience large price fluctuations due to supply and demand dynamics, global events, and economic changes. Make sure you’re comfortable with the potential for market fluctuations. If you’re a short term trader, then ensure you’ve checked the historical price chart for barley to determine if it’s volatile enough for day trading. 

Will investing in barley add diversification to your portfolio?

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For long term investors, diversification is one of the core principles to follow. When you invest in barley and add it to your portfolio, make sure it complements your existing investments. For example, if you already own several barley stocks, you may be better off choosing another commodity. 

Take the time to study the barley market dynamics. 

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Like many commodities, barley has unique characteristics and supply and demand fundamentals. To trade barley, studying the broader barley market, especially historical price trends is essential. Before you invest in barley, you will need to understand the factors that influence its value. 

Choose the right investment vehicle.

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We’ve already discussed the options available to you to buy barley. Each has its own advantages, so you should select the one most suited to your investment goals. For example, trading barley is best done via futures, options, CFDs, and spot. If you invest in barley, stocks or ETFs are the way to go. 

How does the barley market work?

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The barley market functions similarly to other commodity markets. However, not all commodities move in the same way and barley has a number of unique features that make it independent. Below are some of the key factors at play.

  • Supply and demand. Like all markets, the biggest driver of barley prices is the principle of supply and demand. Many factors impact the supply and demand of barley, including production levels, consumption, and even geopolitical events. 
  • Exchanges. Barley is traded on several exchanges where buyers and sellers transact. The price of barley may be slightly different between exchanges. The main barley exchanges are [exchange 1] and [exchange 2].
  • Hedging. The barley market is often used for hedging purposes. Producers of barley may use futures contracts to protect against future price fluctuations, resulting in stability for their business practices. 
  • Speculators and investors. Retail investors and traders can impact barley prices. This is especially the case for short-term movements, where speculators provide liquidity to the market and impact near-term price dynamics. 
  • Weather conditions. Climate plays a large role in barley supply; if weather conditions are favourable, more can be grown, leading to oversupply. Adverse weather conditions such as drought can impact the yield and quality of the crop, which can affect prices. 
  • Government policies. Governments around the world can impact the price of barley through certain policies. Trade and tariff policies can change the barley market, as can government subsidies to barley farmers. Import tariffs can decrease the supply of imported barley, which can push prices higher. 
  • Changes in consumer behaviour. Changes in what consumers want can play a role in the price of barley. For example, certain regions in the world are seeing a shift towards plant-based diets. These diets can increase the demand for barley as it’s commonly used in meat substitute foods. 
  • Other crops. Farmers have limited space to grow their crops, and barley competes with wheat, corn, and more for acreage. Changes in the supply and demand of other crops can impact the price of barley. For example, if the demand for wheat is high, farmers may switch from barley to wheat, which can decrease the supply of barley. 

Is barley a good investment?

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This really depends on the key supply-demand drivers, the status of the global economy and your own needs and desires as an investor. Barley has many benefits that make it a good choice for investors. Its main advantage is its role in diversification. It also has a low correlation with traditional assets such as stocks and bonds, which means if you include barley in your portfolio, you’ll spread risk and add stability. 

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.

What are the risks of trading barley?

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Trading barley has the potential for significant rewards but also carries risks you need to be aware of. These risks are the same across the overall commodity market, but for barley, several more specific ones apply. Below, we’ve explained the main risks of barley investing.

  • Volatility. The barley market can at times encounter price volatility. Compared to other markets, the price of barley can widely fluctuate daily. It can be costly if you’re unprepared for the volatile nature of the barley market. 
  • Macroeconomic factors. Barley prices are affected by several macroeconomic factors, such as demand, inflation, interest rates, dollar strength, and geopolitics. Before trading barley, you should have a good understanding of these. 
  • Barley has no yield. Unlike with other investments such as bonds or dividend stocks, barley does not provide any income yield. So, any returns you make rely entirely on its value increasing over time. You may encounter long periods of flat prices that can reduce your profits. 
  • Low liquidity. In general, commodity markets have less liquidity than more mainstream assets like stocks or currencies. Low liquidity can be problematic, especially if you’re a trader, as you may have wide bid-ask spreads, which could impact the ability to enter or exit positions. 
  • Regulatory risks. Government policies can play a role in the way barley prices move. Export restrictions or changes in tax regulations could introduce unforeseen risks. 

Bottom line

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Barley investing offers the opportunity for diversification and portfolio growth. Barley has potential benefits as a store of value and hedge against inflation, but it’s essential to weigh the risks such as price volatility and market uncertainty before investing. 

One of the key benefits of the barley industry is the various ways you can get involved. There is an investment vehicle for everyone, from barley stocks and ETFs for long term investors to barley futures and CFDs for short term traders. A trusted and regulated trading platform is a must if you want to navigate the barley industry successfully. 

Invest in barley

FAQs

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Sources & references
Risk disclaimer
James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.
Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.