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A commodities exchange is an exchange where various commodities and derivatives products are traded. Most commodity markets across the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, etc.) and contracts based on them. These contracts can include spots, forwards, futures and options on futures. Other sophisticated products may include interest rates, environmental instruments, swaps, or ocean freight contracts.
Commodities trading
Commodities exchanges, usually trade futures contracts on commodities. Such as trading contracts to receive something, say corn, in a certain month. A farmer raising corn can sell a future contract on his corn, which will not be harvested for several months, and guarantee the price he will be paid when he delivers; a breakfast cereal producer buys the contract now and guarantees the price won't go up when it is delivered. This protects the farmer from price drops and the buyer from price rises.
Speculators also buy and sell the futures contracts to make a profit and provide liquidity to the system.
Commodities exchanges across the world
Some examples of commodity exchanges:
- Central Japan Commodity Exchange (Nagoya)
- Commodity Exchange Hannover (Hannover)
- Chicago Board of Trade (Chicago)
- Chicago Climate Exchange (Chicago)
- Chicago Mercantile Exchange (Chicago)
- Euronext.liffe (Europe)
- European Climate Exchange (Europe)
- Intercontinental Exchange (Atlanta)
- London Metal Exchange (London)
- Multi Commodity Exchange (India)
- New York Board of Trade (New York)
- New York Mercantile Exchange (New York)
- Shanghai Metal Exchange (Shanghai)
- The National Commodities and Derivatives Exchange (Mumbai)
- Tokyo Commodity Exchange (Tokyo)
- Winnipeg Commodity Exchange (Winnipeg)
- Yokohama Commodity Exchange (Yokohama)
- Bolsa Nacional Agropecuaria (Colombia)
"Commodities exchange"