Analyze the 5 most liquid commodity futures

Commodity traders thrive in highly liquid markets that provide easy access to the most popular futures contracts in the world. The lower bid-ask spreads of these places can reduce slippage during entry and exit, thereby increasing profit potential. At the same time, more volatile price movements support short-term intraday and swing trading, as well as long-term position trading and market timing.

New participants often confuse commodity futures with index and financial futures contracts including the Standard & Poor’s 500 Index, Eurodollars and 10-year U.S. Treasuries. Commodities represent real objects that can be bought and sold on the spot market. They originated in or on the earth—not in the minds of Wall Street mathematicians. Commodities have physical supply and demand restrictions that affect pricing, and financial instruments can be created based on the numbers on the spreadsheet.

Key points

  • The Chicago Mercantile Exchange (CME) Group is rated as the world’s top futures exchange, processing more than 5.2 million contracts on average every day.
  • Like all world markets, commodity futures trading volumes and open positions fluctuate with political, economic, and natural events (including weather).
  • Commodities attract fundamental-oriented participants, including industry hedgers who use technical analysis to predict the direction of prices.
  • The top five futures include crude oil, corn, natural gas, soybeans and wheat.

CME Group: Overview

The Chicago Mercantile Exchange Group (CME Group) was named the world’s top futures exchange, with an average daily trading volume of 5.2 million contracts in 2020. The group was established after ten years of merger, which added the Chicago Board of Trade (CBOT), New York Mercantile Exchange (NYMEX), Chicago Mercantile Exchange (COMEX) and Kansas City Board of Trade (KCBT).

The exchange was established in 1898 as the Chicago Butter and Egg Commission until it was renamed in 1919. The first batch of futures contracts were issued in the early 1960s, and later financial futures and currency contracts were added, followed by interest rate and bond futures.

Identify top commodity markets

Like all world markets, commodity futures trading volumes and open positions fluctuate with political, economic, and natural events (including weather). For example, the drought in the Midwest can generate strong agricultural futures and attract funds from other futures venues.

Volatility tends to rise and fall gradually over a long period of time. That’s because the commodity trend is developing slowly and can last for years and decades instead of weeks or months. The Unified Exchange reported that the top five commodity futures contracts as of the close of trading on November 26, 2019 are as follows:


Average daily transaction volume (ADV)

Open position

Crude oil (WTI)




532,269 1,505,976
Henry Hub Natural Gas Futures 466,455 1,233,792


192,684 807,569
Chicago SRW Wheat Futures 134,676 357,978

Long-term view of top-tier contracts

The ten-year price chart provides a solid technical foundation for traders and market timers who wish to use these highly liquid instruments. Although commodities attract fundamental-oriented participants including industry hedgers, technical analysis is widely used to predict the direction of prices. In fact, the history of modern charts originated in the Dutch tulip market in the 17th century and the Japanese rice market in the 18th century.

Technical analysis is widely used to predict the price direction of futures contracts.

Crude oil futures

Crude oil futures hit an all-time high of US$147.27 in June 2008 and were sold into their 30s during the economic collapse. It recovered about 70% of the steep decline at the top of 2011, and entered the trading range, with an increase range of US$112 and a fall range of US$80. The contract broke through in 2014 and entered a sharp downtrend, and tested bear market lows in the third quarter of 2015. The new upward trend started in mid-to-late 2017, hit a high in the 1980s in October 2018, and then stabilized at the high in the 1950s. Late November 2019.

Corn futures

Corn futures entered a dormant state between 1998 and 2006, forming an oblong bottom, attracting limited trading interest. It entered a strong upward trend in the second half of 2006, rising vertically to a peak above $7.00 in 2008. The contract lost more than half of its value during the economic collapse, found support near US$3.00 and entered a wave of recovery, and broke US$8.50 in mid-2012. The subsequent downtrend gave up four years of gains, and prices stabilized above the 2008 lows in the second half of 2014. The quiet fundamental actions since then may continue into 2016 or more, and the next uptrend will find substantial resistance above $6.00. As of November 2019, these prices have gradually fallen to about $4.

natural gas

The trading of natural gas futures is different from other energy or commodity markets. The vertical peak for 20 consecutive years disappeared quickly when it appeared. The rebounds above $10 in 1996, 2001, 2006, and 2008 encountered heavy resistance and triggered nearly 100% retracements in the next year or two. As of the end of November 2019, the trading price of natural gas futures contracts was around US$2.50.


Soybean futures bottomed out at their multi-decade lows between 1999 and 2002. The contract subsequently entered a strong upward trend and set a vertical rebound peak in 2004, 2008 and 2012. It turned low in the second half of 2012, and the orderly correction accelerated to the downward trend in 2014. The decline ended above the 2009 low. By late November 2018, the price soared above US$27. As of November 2019, soybean futures are trading at approximately US$9 per bushel.


Wheat futures were sold in 1999 and formed a round bottom in the 2007 breakthrough. The contract entered 2008 vertically, hitting a parabolic record high of nearly $12.00, and collapsed in the same ferocious downward trend, giving up a 100% rebound in only two years. The contract rebounded at the end of 2009, tracing two-thirds of the decline back to the three-year double top model, which broke through the support of $6.00 in 2014. The subsequent downtrend has been testing $3.00 for nearly a year, and this level marks more than a decade of support. As of November 2019, wheat futures prices have almost doubled to nearly $6.

Bottom line

Crude oil leads the market as the most liquid commodity futures market, followed by corn and natural gas. During periods of low pressure in the energy pit, agricultural futures tend to generate the largest volume, while gold futures have experienced boom and bust cycles that greatly affected open positions. It is now the seventh most traded commodity contract, second only to RBOB gasoline.


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