I read quite a few books on trading commodities as well as other markets. I am always looking for new trading techniques, a unique perspective on the markets or a good story about real-life trading. I am also looking for good books to recommend to new commodity traders to help them learn about the markets. The title of this book caught my attention and I thought it might be a good book to teach new traders the fundamentals of commodities. Well, it is and it isn’t.
The bulk of this book is devoted to explaining the fundamentals of the most widely traded commodities in the U.S. The author devotes a chapter to each commodity, except for the grains. That is a bit strange considering they are grown in the U.S. and corn, soybeans and wheat are some of the most actively traded commodities. There is no absence of fundamental research for the grain markets.
While reading through the book, I felt that it didn't create a link between what the commodity is, and how to place a realistic valuation to a commodity based on current and historic data. Also, I noticed a good amount of the information on each commodity is the exact same information on the commodity exchange websites – word for word. Many new commodity traders start their research at the exchanges websites, so there may not be much value-added information by reading this book.
Commodity Trading Information
When studying the fundamentals of commodities, it is important to learn how to apply those fundamentals to the actual trading of the commodity. There were a few generalizations about trading each commodity, but they were far from being trading tips from a veteran floor trader. I didn’t get the feeling that the author is an experienced trader in these commodities or maybe he is quite qualified, but didn’t put his full effort into this book.
There is certainly some useful information in this book, but I don’t feel it is worthy of the price tag. It lacks the original information you would expect from a book like this. There is also an absence of applying the fundamentals to trading.
There are better books on the fundamentals of commodities like Futures: Fundamental Analysis by Jack Schwager. It includes the fundamentals of each commodity as well as an in-depth explanation of how to perform fundamental analysis and apply it to trading commodities.