Understanding commodity market cycles is essential for effective trading. Commodity prices tend to move in cycles influenced by various factors, including supply and demand dynamics, seasonal trends, and macroeconomic conditions. Here are key components of commodity market cycles: 

Expansion Phase: This phase is characterized by rising demand and increasing prices. Factors such as economic growth, rising consumer demand, and supply constraints can contribute to price increases during this phase. 

Peak Phase: In the peak phase, prices reach their highest levels before beginning to decline. This phase often sees high volatility as traders react to changing market conditions and economic indicators. 

Contraction Phase: During the contraction phase, demand decreases, leading to falling prices. Traders may look for opportunities to short commodities during this phase, anticipating further price declines. 

Trough Phase: The trough phase represents the lowest point in the cycle, where prices stabilize. This phase can present buying opportunities for traders who anticipate a reversal in price trends as demand begins to recover.