A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investing in commodities. Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.
In finance, a futures contract is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price of the contract is known as the forward price. The specified time in the future when delivery and payment occur is known as the delivery date. Because it derives its value from the value of the underlying asset, a futures contract is a derivative.
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. Futures exchanges provide physical or electronic trading venues, details of standardized contracts, market and price data, clearing houses, exchange self-regulations, margin mechanisms, settlement procedures, delivery times, delivery procedures and other services to foster trading in futures contracts. Futures exchanges can be organized as non-profit member-owned organizations or as for-profit organizations. Futures exchanges can be integrated under the same brand name or organization with other types of exchanges, such as stock markets, options markets, and bond markets. Non-profit member-owned futures exchanges benefit their members, who earn commissions and revenue acting as brokers or market makers. For-profit futures exchanges earn most of their revenue from trading and clearing fees.
The Dalian Commodity Exchange (DCE) is a Chinese futures exchange based in Dalian, Liaoning province, China. It is a non-profit, self-regulating and membership legal entity established on February 28, 1993.
Holbrook Working was an American professor of economics and statistics at Stanford University's Food Research Institute known for his contributions on hedging, on the theory of futures prices, on an early theory of market maker behavior, and on the theory of storage.
The Minneapolis Grain Exchange (MGEX) is a commodities and futures exchange of grain products. It was formed in 1881 in Minneapolis, Minnesota, United States as a regional cash marketplace to promote fair trade and to prevent trade abuses in wheat, oats and corn. MGEX became a subsidiary of Miami International Holdings after the two companies merged in 2020.
Gordon Rausser is an American economist. He is currently the Robert Gordon Sproul Distinguished Professor Emeritus, Dean Emeritus, at Rausser College of Natural Resources and more recently, a professor of the graduate school at the University of California, Berkeley. On three separate occasions, he served as chairman of the Department of Agriculture and Resource Economics, served two terms as Dean of the Rausser College of Natural Resources, and has served on the board of trustees of public universities and one private university. Rausser has been appointed to more than 20 board of directors of both private and publicly traded companies, including chairman of several of such boards.
Commodity trading in China has a short but high-growth history. With an increasing product variety and deepening liquidity pools, the mainland's futures market is playing an increasingly important role in serving the national economy.
Roger Winks Gray (1921–1996) was the Holbrook Working Professor of Commodity Price Studies professor emeritus at Stanford University. He was a noted expert on agricultural futures markets. He died September 5, 1996 at the age of 76.
Menachem Brenner is a professor of finance and a Bank and Financial Analysts Faculty Fellow at New York University Stern School of Business. He teaches a course in options and futures, along with an introduction to finance course. Brenner also teaches for the Master of Science in Global Finance (MSGF), which is a joint program between Stern and the Hong Kong University of Science and Technology.
Harrison Richard Wellman was professor of agricultural economics at the University of California, Berkeley, and became acting president of the University of California in 1967.
The Giannini Foundation of Agricultural Economics was founded in the 1920s from a $1.5 million gift to the University of California from the Bancitaly Corporation in honor of its founder, A.P. Giannini. This fund has now grown to $20 million that is used to promote and support research on the economics of California agriculture. Members, which include faculty from various University of California campuses, may apply for grants to conduct research on California's agricultural economy and development. The findings are often reported in numerous publications.
Richard L. Sandor is an American businessman, economist, and entrepreneur. He is chairman and CEO of the American Financial Exchange (AFX) established in 2015, which is an electronic exchange for direct interbank/financial institution lending and borrowing. The AFX flagship product, the AMERIBOR benchmark index, reflects the actual borrowing costs of thousands of regional and community banks across the U.S. and is one of the short-term borrowing rates, along with the Secured Overnight Financing Rate, vying to replace U.S. dollar Libor as a benchmark in the U.S.
David Zilberman is an Israeli-American agricultural economist, professor and Robinson Chair in the Department of Agricultural and Resource Economics at the University of California, Berkeley. Zilberman has been a professor in the Agricultural and Resource Economics Department at UC Berkeley since 1979. His research has covered a range of fields including the economics of production technology and risk in agriculture, agricultural and environmental policy, marketing and more recently the economics of climate change, biofuel and biotechnology. He won the 2019 Wolf Prize in Agriculture, was the President of the Agricultural and Applied Economics Association (AAEA), and is a Fellow of the AAEA and Association of Environmental and Resource Economics. David is an avid blogger on the Berkeley Blog and a life-long Golden State Warriors fan.
Food speculation refers to the buying and selling of futures contracts by traders with the aim of profiting from changes in food prices. Food speculation can be both positive and negative for food producers and buyers. is betting on food prices (unregulated) financial markets. Food speculation by global players like banks, hedge funds or pension funds is alleged to cause price swings in staple foods such as wheat, maize and soy – even though too large price swings in an idealized economy are theoretically ruled out: Adam Smith in 1776 reasoned that the only way to make money from commodities trading is by buying low and selling high, which has the effect of smoothing out price swings and mitigating shortages. For the actors, the apparently random swings are predictable, which means potential huge profits. For the global poor, food speculation and resulting price peaks may result in increased poverty or even famine.
Scott H. Irwin is the Laurence J. Norton Chair of Agricultural Marketing and professor in the department of agricultural and consumer economics at University of Illinois Urbana-Champaign.
Refugio I. Rochin is an American professor emeritus in agricultural and resource economics and Chicana/o studies at the University of California, Davis, director emeritus at the University of California, Santa Cruz, and instructor at Pennsylvania State University World Campus. He is an expert on rural Latinas/os and Latina/o Studies.
Elisabeth Sadoulet is an economist and Professor of Agricultural and Resource Economics at the University of California, Berkeley who has carried out field research in China, India, Latin America, and sub-Saharan Africa. Sadoulet was the editor of the World Bank Economic Review from 2010 to 2013, and is a fellow of several scholarly associations in the fields of agriculture and economics.
Trade Data Monitor (TDM) is a trade data company based in Charleston, SC and Geneva, Switzerland. It checks and aggregates monthly import and export statistics for over 100 countries using Harmonized System commodity codes, offers specialized training in trade statistics, and provides clients with a searchable database and built-to-order statistical reports.
