Commodity market
Markets trading primary-sector goods and their derivatives.
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A commodity market trades raw materials from the primary economic sector rather than manufactured products.[1]
Key facts and history
Commodity-based money and crude early commodity markets are believed to have originated in Sumer between 4500 BC and 4000 BC.[2] Sumerians used clay tokens and writing tablets to represent amounts to be delivered, resembling futures contracts.[2] In 1864, wheat, corn, cattle, and pigs were widely traded using standard instruments on the Chicago Board of Trade.[3] Beginning in the 1990s, the robust growth of emerging market economies propelled commodity markets into a supercycle.[4]
Investing in commodities via futures contracts is the oldest method.[1]
What the cited sources add
Lane stated that arbitrage is the glue that binds together global commodity markets separated by distance and time.[4] NYSE chairman Grasso said decimalization should improve the competitiveness of U.S. markets by bringing them into conformity with international practices.[5] According to Lane, real food prices in 2012 reached a peak not seen in 35 years.[4] In 2001, the CME Group introduced a FIX-compliant interface, which subsequently became the standard for commodity exchanges worldwide.[6]
References
- Wikipedia, "Commodity market" (CC BY-SA 4.0), which cites: "Soft Commodity Definition", Investopedia, 15 February 2009 (original not read by us) en.wikipedia.org
- Wikipedia, "Commodity market" (CC BY-SA 4.0), which cites: Banerjee, "Origins of Growing Money", Forbes India Magazine, 16 January 2013; Sinha, "Risk Transfer Through Commodity Derivatives: A Study of Soyabean Oil", 7 January 2011 (original not read by us) en.wikipedia.org
- Wikipedia, "Commodity market" (CC BY-SA 4.0), which cites: "History of the CFTC: U.S. Futures Trading and Regulation Before the Creation of the CFTC", U.S. Commodity Futures Trading Commission; "Variations of commodities in trading", GOptions Trading; James, "Commodity Market Trading and Investment: A Practitioners Guide to the Markets (Global Financial Markets)", Springer, 2016, p. 8 (we also read that source) en.wikipedia.org
- Lane (Deputy Governor of the Bank of Canada), "Financing Commodities Markets presented to the CFA Society of Calgary", 25 September 2012. facts only, no text reused. bankofcanada.ca
- Johnson, "Stock Market Goes Decimal: Complicated fractions abandoned in favor of pennies". facts only, no text reused. infoplease.com
- Wikipedia, "Commodity market" (CC BY-SA 4.0), which cites: Malabre, "Commodities Trading with FIX", CME Group, 15 December 2011 (we also read that source) en.wikipedia.org
Each numbered sentence above was checked against the source it cites before publication. Sentences citing Wikipedia adapt text from the English Wikipedia article Commodity market (contributors), used under CC BY-SA 4.0; this entry is available under the same licence. Other sources were used for facts only; no text or images are copied from them.
More in Economic Concepts & Models
Sources
Compiled from Wikipedia and the sources listed below. Text from Wikipedia is available under CC BY-SA 4.0; this entry is adapted from it.
- Wikipedia: Commodity market (CC BY-SA 4.0).
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