One key advantage of trading commodities is that at least some commodities are largely unaffected by the financial markets. This means that the rise or fall of stock markets has little impact on the value of, say, oats. Commodities also differ from stocks in the sense that there is no takeover risk, and have a weaker focus on any kind of quarterly reports.
However, many factors do significantly affect the supply of commodities, for example, the weather, production strikes, crop and livestock diseases, major oil discoveries, energy prices and emerging technologies. This makes it important for the commodity trader to keep up to date with relevant international news – to aid the trader to respond quickly to sudden events that may significantly affect a particular commodity’s value.