commodity market, 

organized traders' exchange in which standardized,

graded products are bought and sold. Worldwide, there are 48 major
commodity exchanges that trade over 96 commodities, ranging from
wheat and cotton to silver and oil. Most trading is done in futures
contracts, that is, agreements to deliver goods at a set time in the future
for a price established at the time of the agreement. Futures trading
allows both hedging to protect against serious losses in a declining market
and speculation for gain in a rising market. For example, a seller may sign
a contract agreeing to deliver grain in two months at a set price. If the
grain market declines at the end of two months, the seller will still get
the higher price quoted in the futures contract. If the market rises,
however, speculators buying grain stand to profit by paying the lower
contract price for the grain and reselling it at the higher market price.
Spot contracts, a less widely used form of trading, call for immediate
delivery of a specified commodity and are often used to obtain the goods
necessary to fulfill a futures contract. An independent U.S. regulatory
agency, the Commodity Futures Trading Commission was established in
1974 to regulate commodity markets. In 1982, the Chicago Mercantile
Exchange introduced a futures contract for Standard & Poor's 500 U.S.
companies that allows investors to speculate on the future prices of those
stocks. Trading of S&P 500 and other financial futures has broken down
some of the barriers that once separated stock, bond, and commodity
markets and made it easier for investors to hedge their stock
investments. Critics charge that the futures trading at the commodity
markets in Chicago has made stock prices more volatile. The Chicago
Board of Trade is the largest futures and options exchange in the United
States, the largest in the world is Eurex, an electronic European
exchange.