Commodity Exchanges
The venues and clearinghouses where commodity risk trades, clears, and settles.
Overview
CME Group runs grains, energy, metals, and livestock from Chicago and New York. ICE owns European energy and the New York softs, sugar, coffee, cocoa, cotton, and orange juice. The London Metal Exchange runs nonferrous metals with its warehouse system, Singapore handles iron ore and rubber, and Chinese exchanges run the largest volumes in everything from rebar to palm, with foreign access quotas. Clearinghouses mutualize counterparty risk, futures commission merchants route and custody customer business, and regulators such as the CFTC police position limits, large trader reporting, and delivery mechanics. Consolidation since the 2000s built near monopolies in listed derivatives.
Related Topics
Futures Contracts
Each contract fixes quantity, quality, delivery point, and months, 1,000 barrels at Cushing, 5,000 bushels in store, so only price...
Spot and Forward Markets
Spot is now: wet barrels, cash grain at the elevator, metal in the warehouse, priced at a location with a differential to the benc...
Contango
The term, an old piece of London exchange slang, describes an upward sloping forward curve where nearby months are cheaper than de...
Backwardation
In backwardation the front month costs more than deferred months: users bid up barrels available now, paying a premium for immedia...