SOFTS OVERVIEW

Unlike the other commodity groups, softs are also known as food and fiber because this group is mainly composed of food related items (cocoa, sugar, and orange juice) as well as Cotton, which can be considered a fiber. This group behaves very similarly to the grain markets.  Planting tends to be the strongest time of the year, while highs are typically made during pollination, and just prior to harvest the lows are seen.

The other reason this group tends to segregated from the rest of the commodities is that the bulk of production is done outside the United States.  Because production is centered in third world countries (Africa, and South America), statistics regarding production are not as reliable, as the USDA is the most accurate and diligent statistical source in the world.

 

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