Title: Commodity Price Risk Definition
Headings: Commodity Price Risk
Commodity Price Risk
What Is Commodity Price Risk?
Key Takeaways
Understanding Commodity Price Risk
The Risk to Buyers: Automobile Manufacturers
The Risk to Producers: Oil Companies
Hedging Commodity Price Risk
Factors in Commodity Price Fluctuations
Political Factors
Weather
Technology

Content: In 2018, former President Donald Trump imposed tariffs on steel and aluminum imported from foreign countries. The direct effect of these tariffs was to increase steel and aluminum prices in the United States relative to the rest of the world. 4 ﻿
China retaliated against Trump's tariffs by imposing its own tariffs on U.S. agricultural products. With lower demand from China, excess crops must be sold in other markets. As a result, many crop prices were down in the United States in 2019. Weather
Seasonal and other weather fluctuations have a substantial impact on commodity prices. The end of summer brings with it plentiful harvests, so commodity prices tend to fall in October. These seasonally depressed commodity prices may be one reason major stock market crashes often happen in October. Droughts and floods can also lead to temporary increases in the prices of certain commodities. Technology
Technology can have a dramatic influence on commodity prices.