Commodity Futures Price
Commodity futures price quotes are available for food and fiber, grain and oil seed, interest rates, cattle and hogs, metals, and oil and energy futures. No matter whether one is trading corn futures, oil futures, copper futures, gold futures, natural gas futures, or silver futures knowing the current commodity futures price is essential for profitable futures trading in commodities. One can find the current price on futures for any given commodity by looking online at the Chicago Mercantile Exchange, (CME), the Chicago Board of Trade (CBOT), the New York Mercantile Exchange (NYMEX), and the commodity exchange, COMEX. An excellent means of learning about commodity futures pricing and commodities markets is commodity and futures training.
Commodity futures contracts are agreements between two parties for the sale of a given quantity of a given commodity on a specified future date. Futures contracts can be for a few months or for years. For example, in May the COMEX trades corn futures contracts for delivery in May, July, September, and December of the same year. It also trades contracts for delivery in March, May, July, September, and December of each of the next two years. Then it trades contracts for July and December three years hence. Depending upon crop conditions, market demand, and factors such as the price of oil and the amount of corn being diverted to ethanol production the commodity futures price of corn will vary above or below the current spot price.
A commodities trading in futures should be distinguished from options trading in commodity futures. A futures contract confers the obligation to buy or sell the commodity in question if the contract is held until expiration. In fact, many traders will exit their position in the days prior to expiration. However, producers and buyers who are hedging commodities will, in fact, deliver or take delivery of the commodity in question. On the other hand buying calls and buying puts in the commodity futures market confers the option to buy or sell but not the obligation. Selling calls and selling puts, of course, confers the obligation if the buyer decides to exercise the option. The advantage of buying calls or puts is that the trader will only lose his premium if the commodity price does not move as expected.