How to Trade Agriculture Futures?

Understand the nature of agricultural commodities futures: they are contracts to buy or sell corn, wheat or other commodities at a specified time and cost.


Pick how much you can afford to lose. Futures are highly complex and dicy, and because trades are done on margin, investors stand to lose far over they have on account.


Ask about the broker's trading methods and style. Discover a broker whose methods suit your views and interests.


Contact a broker who is registered with the National Futures Association (1-800-621-3570). Individuals cannot trade futures; they must use registered brokers.


Set limits on the amount you will invest and on the amount of loss you are willing to accept.


Think about allowing the broker to make trades on your behalf in a "discretionary" account. In case you set up a nondiscretionary account, you must authorize all trades personally, which can be time-consuming and tricky.


Think about joining a commodity pool in lieu of trading through your own account. You and other investors buy a stake in the pool, and the broker buys and sells futures on behalf of the group.


Establish a margin account. This is funds you will deposit with the brokerage. The margin usually will be only a small percentage of your actual position; therefore, losses can far exceed the amount in your account.


Be prepared to boost the amount in your margin account on short notice. If your losses exceed specified limits, the broker might close out your positions.