Commodity

Market
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Guindo
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Oracion
COMMODITY
MARKET ● Definition
● Commodities
● Types of Commodities
● Trading in Commodities
● Types of Commodity Market
● Participants
 Let’s talk
about
MARKET of
COMMODIT
Y
Commodity Market
 is a physical or virtual marketplace for
buying, selling, and trading raw or
primary products.
 there are currently about 50 major
commodity markets worldwide that
facilitate trade in approximately 100
primary commodities.
 Title:
Book Title

Author:
Wendy Writer
About Publisher:
Publisher Name

Copyright Date:
20XX
 Commodities
● are another class of assets just like stocks and
bonds. However, they are different in the sense that
they are products that come from the earth.
○ cotton, oil, gas, corn, wheat, oranges,

gold, and uranium

2 TYPES of COMMODITIES
Soft commodities
Agriculture

Hard commodities
Metal
Energy
  are those such as coffee, corn – an
important source of food for
livestock and humans, sugar,
soybeans – whose oil is used for
Agricultura making crackers, breads, cakes, and
cookies, and wheat – one of the
l most important food crops in the
Commoditi world.

es Jeera
Pepper
Chili
Turmeric
Guar Seed
 COMMODITI
ES
● Metals come in gold, used in
making jewelry, silver, also used
for jewelry and having many
industrial uses as well, and
copper, the most widely used
form of electrical wiring.

Copper
Nickel
Lead
s
 Energy commodities include
crude oil used in
transportation activities and
production of plastics, natural
gas used for electricity
generation, and gasoline,
which powers light-duty trucks
and cars.
How is
Commoditi
es Traded?
● Most commodities are traded on their own exchanges,
which include the New York Mercantile Exchange
(NYMEX), the Chicago Mercantile Exchange, the Chicago
Board of Options Exchange (CBOE), the Kansas City Board
of Trade, the Minneapolis Grain Exchange, and the
Chicago Board of Trade (CBOT).

● Investors may opt for indirect exposure through stocks,

exchange-traded funds, and mutual funds.
2 TYPES of COMMODITY
MARKETS
Normal futures market

Inverted futures market

Normal Futures
Market
● the prices of futures contracts
increase with maturity. The
contract with the nearest contract
month is priced the lowest.
Meanwhile, the contract with the
most distant contract month is
priced the highest.
Inverted Futures
Market
●  the prices of futures
contracts decrease with
maturity. The contract with
the nearest contract month
is priced the highest and
the contract with the most
distant contract month is
priced the lowest.