How to trade & invest in agriculture commodities for beginners 2025

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In this guide, we explore the foundational aspects of agriculture investments, from the factors that drive agriculture commodity prices to the various investment vehicles available, such as spot markets, futures contracts, stocks of agriculture companies, and exchange-traded funds (ETFs).

What are agriculture commodities?

Agricultural commodities are resources like crops and animals that occur naturally and are produced to serve as food, materials, or fuel. Grains, livestock, and foods grown on plantations are all classified as agricultural commodities. 

These commodities have been vital resources for humans for thousands of years. At their most basic level, agricultural markets are a way for those who grow the crops or rear the animals to sell their produce to the people who need them.

Can I invest in agriculture commodities?

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

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

You can invest or trade agriculture through many different avenues, including physical ownership, agriculture 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 agriculture online?

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

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How to trade & invest in agriculture

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What is agriculture investing?

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

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

Although agriculture 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 agriculture investors from traders.  

What is agriculture trading?

Agriculture 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 agriculture 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 agriculture’s future growth. Futures contracts, spot markets, options, and various derivative instruments are standard methods for trading agriculture.

Why invest in the agriculture industry?

Agriculture commodities offer a way to take advantage of the world around us. Their performance is often very different to the stock market, as prices are affected by different factors and often have a much more global reach. 

Commodity prices generally increase during periods of inflation, while stock prices tend to fall and the value of the money in your pocket goes down. By owning commodities alongside stocks, cash, and other assets, you can create a portfolio that copes with all types of economic climates. 

Everyone always needs food and fuel. Even in the worst economic climates, people still need to eat, so the demand for these types of commodities is stable. You can invest in agricultural commodities to hedge against the risk of a recession or economic decline that might affect the other assets you own.

Ways to invest in agriculture

There are several options available when it comes to investing in agriculture 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 agriculture.

Buy agriculture stocks 

One of the easiest ways to invest in the agricultural sector is to buy stocks in companies that have exposure to the agriculture industry. These could be businesses involved in farming, manufacturing related goods, or transporting those products around. 

There are lots of factors that affect a company’s stock price. So while investing in agriculture stocks is a way to get some exposure to the industry, there may not be a perfect correlation between agriculture prices and the fortunes of a stock price.

Some agriculture stocks you might want to consider are:

• Archer-Daniels-Midland (NYSE:ADM)
• Tyson Foods (NYSE:TSN)

Invest in agriculture ETFs

ETFs, or exchange-traded funds, are investment vehicles that track the performance of a particular asset, industry, or index. You buy shares in an agriculture ETF to gain exposure to the agriculture sector.

Some ETFs track the price of a specific commodity, such as wheat. Others own a batch of related agriculture commodities or track an index of agriculture stocks and so allow you to invest in the sector as a whole.

ETFs generally have a low cost of entry, so you can invest with a small amount of money, while you can invest through a regular trading platform, so they’re accessible to everyone.

Here are some of the best agriculture ETFs to buy in 2025 that cover the agricultural sector:

• Invesco DB Agricultural Fund (DBA)
• Teucrium Agricultural Fund (TAGS)

Invest in agriculture funds or trusts

Funds and trusts are actively managed investments, where a fund manager pools together money from lots of different people and decides what to invest in. Each fund has a defined goal, such as to outperform a particular agriculture index over a while.

This type of investment normally requires each person to put up a substantial minimum deposit to join. There may also be a limited number of places available, so you can only buy shares in the fund when someone else wants to sell their spot.

Here are some of the best agriculture funds to invest in:

• Barings Global Agriculture Fund
• Vanguard Commodity Strategy Fund Admiral Shares

Trade agriculture futures contracts

Futures contracts are the most common way for the experts to trade agricultural commodities. With futures, you can speculate on agriculture commodity price changes, and predict whether you think they’re going to rise or fall.

You need plenty of experience and industry knowledge to understand the futures market and trade it successfully. Some agriculture markets can be highly illiquid and have large spreads, particularly during periods of price volatility. 

Here are some popular agriculture commodities that you might want to trade.

• Trade barley
• Trade canola
• Trade cocoa
• Trade corn
• Trade soybean
• Trade wheat

Trade agriculture CFDs 

Contracts for Difference (CFDs) are a popular way to speculate on agriculture 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 agriculture. 

With CFDs, you can profit from both rising and falling prices. CFDs also offer leverage, which can amplify your exposure to agriculture markets. 

Some of the best agricultural CFDs you can trade are below. 

• Trade coffee
• Trade rubber
• Trade lumber
• Trade orange juice
• Trade cattle 
• Trade lean hogs
• Trade sugar

Buy farm REITs

‘REIT’ stands for Real Estate Investment Trust and means an investment vehicle that owns land or a property portfolio. You can buy and sell shares in the trust just like a stock or ETF. This is often a way for everyday investors to put money into fixed assets without needing vast sums to buy the land themselves.

Farm REITs are exactly what they sound like portfolios that include farms and farmland. They benefit not only from the revenues that a farm earns for its produce but also from increasing land values, which tend to trend up over time.

Here are a couple of farmland REITs to consider investing in.

• Gladstone Land Corporation (NASDAQ: LAND)
• Farmland Partners Inc. (NYSE: FPI)

What are the most traded agri commodities?

Agricultural commodities are some of the most popular and widely traded commodities in the world. Some agri markets have even more trading volume than commodities like gold and silver, which highlights the importance of the overall sector. In the table below, you can find the ten most traded agricultural commodities, with their trading volume and exchange. 

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

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

What to consider before making an agriculture commodity investment

When investing in agriculture, 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 agriculture trading or investing strategy. 

What are your investment goals?

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 agriculture derivative to use. 

Does the agriculture industry suit your risk tolerance?

Commodities like agriculture 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 agriculture to determine if it’s volatile enough for day trading. 

Will investing in agriculture add diversification to your portfolio?

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

Take the time to study the agriculture market dynamics. 

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

Choose the right investment vehicle.

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

How does the agriculture market work?

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

• Weather conditions. Anything that lives or grows outside and must be transported vast distances can be impacted by the weather. Poor harvests, storms, droughts, and disease can all happen suddenly and have a dramatic impact on the price.
• Geopolitical events. Politics, like the weather, can be difficult to predict. The Russia-Ukraine war is just one example of a geopolitical event that affected food prices around the world, and sometimes no amount of preparation can help you foresee these events.
• Market cycles. There is a natural ebb and flow to the markets because of the harvest cycle, while it’s almost impossible for prices to stay high indefinitely. High food prices for long periods can lead to political instability, and purchasers can switch to other, cheaper grains.
• Supply and demand. Like all markets, the biggest driver of agriculture prices is the principle of supply and demand. Many factors impact the supply and demand of agriculture, including production levels, consumption, and even geopolitical events. 
• Exchanges. Agriculture is traded on several exchanges where buyers and sellers transact. The price of agriculture may be slightly different between exchanges. The main agriculture exchanges are [exchange 1] and [exchange 2].
• Hedging. The agriculture market is often used for hedging purposes. Producers of agriculture 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 agriculture prices. This is especially the case for short-term movements, where speculators provide liquidity to the market and impact near-term price dynamics. 

Are agricultural commodities a good investment?

This really depends on the key supply-demand drivers, the status of the global economy and your own needs and desires as an investor. agriculture 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 agriculture in your portfolio, you’ll spread risk and add stability. 

You can also use agriculture as a hedge against inflation. When inflation rises, the value of agriculture historically appreciates. The real world use of agriculture also creates constant demand. However, it’s important to remember that agriculture investing is not totally risk-free. 

A wide range of factors influences its price, so you’ll need to have a solid understanding of market dynamics before investing. 

What are the risks of trading agriculture?

Trading agriculture 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 agriculture, several more specific ones apply. Below, we’ve explained the main risks of agriculture investing.

• Volatility. The agriculture market is known for its price volatility. The price of agricultural commodities can swing rapidly. Big price swings mean wider spreads (the difference between the buy and sell price on a futures contract, for example), which can make trading difficult and expensive. 
• Agriculture investing requires intimate knowledge of the markets. Commodity markets are complex and many of the people who invest are deeply embedded in the industry. You need to understand the mechanisms of the market otherwise you run the high risk of losing money.
• Macroeconomic factors. agriculture prices are affected by several macroeconomic factors, such as industrial demand, inflation, interest rates, dollar strength, and geopolitics. Before trading agriculture, you should have a good understanding of these. 
• Agriculture has no yield. Unlike with other investments such as bonds or dividend stocks, agriculture 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 agriculture prices move. Export restrictions or changes in tax regulations could introduce unforeseen risks. 

What agriculture commodities can I invest in?

There are lots of options, ranging from grain that forms the basis for human and animal diets, to cotton and rubbers that are used as raw materials. Learn how to invest in popular agricultural commodities with these investment guides.

• Barley. An agri commodity used in various food and beverage industries
• Canola. Canola is a popular choice for cooking oils
• Cattle. Cattle and live cattle is a multi-billion-dollar industry
• Cocoa. Cocoa is the base ingredient used in making chocolate
• Coffee. Coffee is one of the world’s most consumed beverages
• Corn. The corn industry is massive and it’s one of the most traded agri commodities
• Cotton. Cotton is used in clothing around the world 
• Lean hogs. Like cattle, lean hogs are an important livestock commodity
• Lumber. Lumber’s importance in the global economy is massive
• Orange juice. Orange juice is a beverage known for its health benefits
• Rubber. Rubber can be natural or synthetic. Natural rubber is an agricultural product
• Soybeans. Soybeans are one of the most traded agricultural commodities
• Sugar. Sugar is used around the world as a sweetener in food and beverages
• Wheat. Wheat’s history goes back centuries and is an integral commodity today

Bottom line

Agriculture investing offers the opportunity for diversification and portfolio growth. Agriculture commodities have 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 agriculture industry is the various ways you can get involved. There is an investment vehicle for everyone, from agriculture stocks and ETFs for long term investors to agriculture futures and CFDs for short term traders. A trusted and regulated trading platform is a must if you want to navigate the agriculture industry successfully. 

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