Commodity Research | Innovative Supply and Demand Analysis

Commodity Research

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Click on any link to see a commodity analysis investment report. Each report breaks down the long term and short term potential of a commodity investment (futures, options & ETF commodities). Add your comments to our SWOT Analysis. (see tutorial Commodity Research Experimental Mode).

Commodity Research

Commodity Market Impact
Agave Syrup Commodity Research and Analysis
Aluminum Commodity Research and Analysis Construction
Beef Commodity Research and Analysis
Caffeinated Drinks Commodity Research and Analysis
Cannabis Commodity Research and Analysis
Live Cattle Commodity Research and Analysis
Chicken Commodity Research and Analysis
Coal Commodity Research and Analysis Energy
Coca Commodity Research and Analysis
Cocoa Commodity Research and Analysis
Coffee Commodity Research and Analysis Coffee Brewers
Computer Processing Power Research and Analysis Technology
Copper Commodity Research and Analysis Construction
Corn Commodity Research and Analysis Tobacco
Cotton Commodity Research and Analysis Clothing
Crude Oil Commodity Research and Analysis Energy
Diamond Commodity Research and Analysis Industrial
Duck Commodity Research and Analysis
Electricity Commodity Research and Analysis Technology
Ethanol Commodity Research and Analysis Energy
Fish Commodity Research and Analysis
Gasoline Commodity Research and Analysis Energy
Gold Commodity Research and Analysis Jewelry
Heating Oil Commodity Research and Analysis Energy
Hogs Commodity Research and Analysis Staple
Iron Commodity Research and Analysis
Lead Commodity Research and Analysis Material
Lumber Commodity Research and Analysis Paper
Lysergic Acid Diethylamide Research and Analysis
Milk Commodity Research and Analysis Staple
mobiles
Mossisinite Commodity Research and Analysis
Natural Gas Commodity Research and Analysis Natural Gas Utilities
Nickel Commodity Research and Analysis Material
Oats Commodity Research and Analysis Staple
Opium Commodity Research and Analysis
Palladium Commodity Research and Analysis
Palm Oil Commodity Research and Analysis Energy
Pearls Commodity Research and Analysis Discretionary
Plastic Commodity Research and Analysis Automotive
Platinum Commodity Research and Analysis Jewelry
Polyester Commodity Research and Analysis Manufacturing
Pork Bellies Commodity Research and Analysis Staple
Propane Commodity Research and Analysis
Rapeseed Commodity Research and Analysis
Rare Earth Metals Commodity Research and Analysis Telecom
Rice Commodity Research and Analysis Staple
Rubber Commodity Research and Analysis Automotive
Saccharin Commodity Research and Analysis
Salt Commodity Research and Analysis Food Markets
Silicon Commodity Research and Analysis Semiconductors
Silver Commodity Research and Analysis Jewelry
Solar Power Commodity Research and Analysis
Soybean Commodity Research and Analysis
Steel Commodity Research and Analysis Construction
Stevia Commodity Research and Analysis
Sugar Commodity Research and Analysis
Tea Commodity Research and Analysis
Textile Commodity Research and Analysis
Tin Commodity Research and Analysis Construction
Tobacco Commodity Research and Analysis Staple
Turkey Commodity Research and Analysis
Uranium Commodity Research and Analysis Nuclear Energy
WaterCommodity Research and Analysis
Wheat Commodity Research and Analysis Staple
Wool Commodity Research and Analysis Textiles
Zinc Commodity Research and Analysis Construction

Commodity Research - Supply and Demand Analysis

Commodity price potential is very difficult to predict. To estimate the indirect potential of a commodity, WikiWealth uses the average investment potential of individual companies, which use the commodity in production. Some companies benefit when commodity prices increase and other companies have a negative impact from commodity price increases. The difference between the potential of these companies equals WikiWealth's Fundamental Commodity Analysis (quantitative analysis) conclusion.

Commodity Analysis

A top analyst can predict the direction of commodity prices, but no one can predict the fair value of commodity prices, because value depends on supply and demand, which adjusts to changes in price. Commodity prices are circular. When prices are high, supply increases until prices drop. When prices are low, supply decreases until prices increase. When prices decrease, a certain set of companies will benefit, whereas, high prices benefit other companies. WikiWealth gives the difference between these fluctuations as the potential conclusion.

What is a Commodity?

A commodity is some good for which there is demand, but which is supplied without qualitative differentiation across a market. It is a product that is the same no matter who produces it, such as petroleum, notebook paper, or milk. In other words, copper is copper. The price of copper is universal, and fluctuates daily based on global supply and demand. Stereos, on the other hand, have many levels of quality. And, the better a stereo is, the more it will cost.

One of the characteristics of a commodity good is that its price is determined as a function of its market as a whole. Well-established physical commodities have actively traded spot and derivative markets. Generally, these are basic resources and agricultural products such as iron ore, crude oil, coal, ethanol, salt, sugar, coffee beans, soybeans, aluminum, rice, wheat, gold and silver.

Commoditization occurs as a goods or services market loses differentiation across its supply base, often by the diffusion of the intellectual capital necessary to acquire or produce it efficiently. As such, goods that formerly carried premium margins for market participants have become commodities, such as generic pharmaceuticals and silicon chips.

There are two approaches to commodity investing: 1. Indirect Approach: where investors purchase companies that use or produce the commodity. 2. Direct Approach: where investors purchase the actual commodity and hope for the prices to increase.

Benefit from Increasing Prices: Example

Debeers operates diamond mines mainly in Africa. If diamond prices increase, Debeers benefits from higher revenue. However, higher diamond prices hurt companies, which buy diamonds for jewelry for example. Higher prices cause demand to decrease and thus supply of diamonds to increase, because many will go unsold. As supply increases, prices fall until demand increases because of lower prices. An equilibrium price and supply will keep diamond prices steady over the long-term.

Benefit from Increasing Prices: Example

Tiffany & Co purchases diamonds to sell to customers. Higher prices for diamonds are harder to sell to customers, therefore, Tiffany's investment potential will decrease. As customer demand decreases, so will Tiffany's purchases of diamonds from Debeers. Debeers will in turn, mine fewer diamonds, until the supply decreases enough for customers to increase diamond purchases. An equilibrium price and supply will keep diamond prices steady over the long-term.

Source: http://en.wikipedia.org/wiki/Commodity