Commodity exchanges have extensive resources from which to obtain information. For instance, the Chicago Board of Trade and Chicago Mercantile Exchange have numerous free publications that explain topics ranging from the duties of a floor trader to understanding and using basis information. [...] Additionally, there are two primary regulatory bodies overseeing futures/options trading. These entities are the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA).
The threat of inflation and the ease of access of commodity ETFs are some factors that account for the growing popularity of commodity exchange traded funds.
The Commodity Exchange Price Provisions (CEPP) are used in conjunction with the Common Crop Insurance Policy Basic Provisions and the Crop Provisions pertinent to the following crops: barley, canola (including rapeseed), corn, cotton, grain sorghum, rice, soybeans, sunflowers, and wheat.
With increased demand for finite resources, the evolving need of a formal marketplace to facilitate the international trade of secondary commodities is escalating. [...] The scope of the exchange includes anything scrap or used, including scrap metals, waste paper recovery, rubber & plastic recycling, wood and organic materials, by-products, waste materials, used or secondhand items, surplus inventories, used equipment, asset recovery, waste electronics & electrical equipment (WEEE).
Commodity futures contracts, which includes everything from orange juice and precious metals to pork bellies and treasury bonds, are fast paced and volatile instruments through which a customer hopes to earn money from future price changes.
The method of carrying out trades has been changed in recent years. Traditional methods such as the open outcry system – men in coloured jackets shouting prices at each other across the trading floor – is all but being replaced by global electronic trading platforms. [...] With the advance of technology, we have seen the recent merging of exchanges and this consolidation is likely to continue with the growth of commodities as an asset class, and the accessibility of trading to a growing group of retail traders and investors.
When a futures market starts running too hot, as with silver about a year ago, the individual exchange can take a series of actions to slow it down. Margin requirements can be increased, position limits on the number of contracts allowed can be set, unethical members can be banned from buying or selling. If things really spin out of control, the market can be closed.
Exchange Rule 104.36, which governs exchange of futures for physicals ('EFP') transactions on the COMEX Division, refers to a 'physical commodity' as one of the required components of an EFP transaction but also indicates that the physical commodity need only be substantially the economic equivalent of the futures contract being exchanged.
For many poor rural farmers, getting their products to market is one of the most daunting obstacles they face. Markets in developing countries often have weak integration, characterized by a lack of communication and information-sharing; thus, while markets in one region may offer higher prices for a commodity, farmers in other regions have no way of learning about, and taking advantage of, these price differences. [...] Taken together, these factors keep many rural farmers and traders from investing in and expanding their businesses. [...] the development of a commodity exchange in Ethiopia helped that country begin to overcome the constraints of weak market integration and high transaction costs.
Only commodities of a standard quality are traded on the commodity exchange. For this purpose, each commodity has to be a fixed use value, a standard commodity, any unit of which can be replaced by any other. It is as a quantum of equal use value that the commodity has become an exchangeable good. The mass of commodities is distinguishable only quantitatively on the commodity exchange. According to the nature of the commodity, and the exchange regulations, a given quantity - so many kilograms, so many sacks - is taken as the unit in concluding a deal. Hence only those commodities are suited to commodity exchange trading which are by their nature readily interchangeable, or can be made so by relatively simple and inexpensive regulations.
Futures contracts, at present, are standardized contracts-with re spect to the purchase and sale of a commodity to be delivered in a specified month-in which the terms, except for the price, are fixed by the exchanges. A futures contract may be executed during the hours of trading fixed by the exchanges at any time prior to the close of trading in a future.
The CEA subjects contracts for the sale of a commodity for future delivery and options on such contracts to the exclusive jurisdiction of the CFTC. The CFTC also has jurisdiction over commodity option contracts, although the CEA does not unambiguously characterize the CFTC’s jurisdiction over such instruments as exclusive. In addition, transactions in, or in connection with, commodity futures contracts and commodity options contracts must be conducted in accordance with the CEA and regulations promulgated by the CFTC.