Last updated Refinitiv/CoreCommodity CRB Index 1993–2012
The Refinitiv/CoreCommodity CRB Index (RF/CC CRB) is a commodity futures price index. It was first calculated by Commodity Research Bureau, Inc. in 1957 and made its inaugural appearance in the 1958 CRB Commodity Year Book.
The Index was originally composed of 28 commodities, 26 of which were traded on exchanges in the U.S. and Canada, and two cash markets. It included barley and flaxseed from the Winnipeg exchange; cocoa, coffee "B", copper, cotton, cottonseed oil, grease wool, hides, lead, potatoes, rubber, sugar #4, sugar #6, wool tops and zinc from New York exchanges; and corn, eggs, lard, oats, onions, rye, soybeans, soybean meal, soybean oil and wheat from Chicago exchanges. In addition to those 26 markets, the Index also included the spot New Orleans cotton and Minneapolis wheat markets which were added to balance some commodities repeated in the Index as by-products of other commodities.
The original base period was 1947-49, the same as the Bureau of Labor Statistics Spot Market Index. This was purposely done to facilitate easy comparison of both spot and futures indexes.
The Refinitiv/CoreCommodity CRB Index (RF/CC CRB) was originally designed to provide dynamic representation of broad trends in overall commodity prices. In order to ensure that it continued to fulfill that role, its components and formula have been periodically adjusted to reflect changes in market structure and activity. Since 1957, there have been ten revisions to Index components. The first was in 1961 and the latest in 2005.
In the original calculation, all future deliveries up to a year ahead were averaged to calculate the current price. In 1987, the calculation was changed to only include deliveries nine months forward. In 1989, all non-cycle months were excluded from the calculation.
The 1995 revision lowers the number of forward deliveries included to those within six months of the current date, up to a maximum of five delivery months per commodity. However, a minimum of two delivery months must be used to calculate the current price, even if the second contract is outside of the six-month window.
There has also been a continuous adjustment of the individual components used in calculating the Index since the original 28 were chosen in 1957. All of these changes have been part of the continuing effort of Refinitiv to ensure that its value provides accurate representation of broad commodity price trends.
It currently is made up of 19 commodities as quoted on the NYMEX, CBOT, LME, CME and COMEX exchanges. These are sorted into 4 groups, each with different weightings. These groups are:
Petroleum based products (based on their importance to global trade, always make up 33% of the weightings)
Liquid assets
Highly liquid assets
Diverse commodities.
The index comprises 19 commodities: aluminum, cocoa, coffee, copper, corn, cotton, crude oil, gold, heating oil, Lean Hogs, live cattle, natural gas, nickel, orange juice, silver, soybeans, sugar, unleaded gas and wheat.
The tenth revision of the index renamed it the Refinitiv/Core Commodity CRB Index, or TR/CC CRB.
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. Investors access about 50 major commodity markets worldwide with purely financial transactions increasingly outnumbering physical trades in which goods are delivered. Futures contracts are the oldest way of investing in commodities. Futures are secured by physical assets. 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 agreement to buy or sell something at a predetermined price at a specified time in the future, between parties not known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price the parties agree to buy and sell the asset for is known as the forward price. The specified time in the future—which is when delivery and payment occur—is known as the delivery date. Because it is a function of an underlying asset, a futures contract is a derivative product.
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Refinitiv Indices is a line of indices and index services from Refinitiv:
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