Futures trading is a sort of investment where one can earn money by speculating on the cost of a certain commodity going down or up in days to come. Commodities are sometimes the fundamental things that folk use every day. Almost all of the times, these commodities are the basic necessities required by a modern society.

When talking about certain commodities being traded in the commodity market, it must meet precise circumstances to make it acceptable for trading. One of the conditions is that the commodity should be standardised. In trading rural and commercial commodities, the traded commodity should be in its basic raw and unprocessed state. In this case, Wheat could be traded in the commodity market though not flour.

Another condition that a certain commodity has to meet is that the perishable kind should have adequate shelf life. The reason for this is that these commodities are traded with their delivery scheduled deferred at a future time. Therefore, there may require a long shelf life so that the commodities may be delivered with its quality still good and intact. Another condition that a certain commodity should meet is that it should have a price that changes often, creating some uncertainty as well as opportunity to profit.

The history behind futures trading in commodities evolved from the farmer's need to earn more from every harvest. Before commodity futures trading started, the farmers were always at the mercy of the dealer when it comes to pricing and selling their harvests. Dealers usually set the prices and the farmers cannot to anything but accept the terms. In a way the farmers were being exploited by some dealers and so another form of selling their harvest.

In the hunt for having a rather more fair system of engaging in business, farmers commenced offering future crop to interested customers. The farmers started giving their own terms for the future crops to dealers. The exchange is composed of commodities offered as a certain price and to be delivered as a mentioned date. Contracts were then drawn up between the farmer and the interested customer that mentioned the certain quantity of commodity to be delivered at a selected time in future times. From this system, what's now known as commodities trading has started.

It was sometime in 1878 a central dealing facility for such commodities contracts was established in Chicago. In this facility, farmers and dealers commenced initially in spot dealing of their grains that was immediately delivered on a reached settlement in cost. It ultimately developed into commodities trading when farmers started committing future crops to interested dealers prepared to buy to make certain that their grains supply are maintained in future times.

At the start, commodities trading at first consists only of one or two farm commodities like grains. But later on, a big number of other commodities joined in. Now there are commodities trading markets that deal in valuable metals like gold, silver and platinum. There's also a commodities trading market for stock and cattle as well as for energy products like crude oil and natural gas. It has gone on to incorporate commodities trading in coffee, orange ad industrials like lumber, cotton and even on interest rate bearing instruments like currencies and stocks.