Name Open High Low Current Value Change % Chg

 US Markets

Dow Jones Industrial

12,398.06 12,483.81 12,397.69 12,441.58 38.82 0.31
Average

Nasdaq 2,789.02 2,801.15 2,788.29 2,796.86 13.94 0.50

Dow Futures 12,399.00 12,465.00 12,383.00 12,430.00 21.00 0.17

Nasdaq Futures 2,220.50 2,339.00 2,322.75 2,331.00 5.75 0.25

 European Markets

FTSE 100 5,880.99 5,951.37 5,880.99 5,938.87 57.88 0.97

CAC 40 3,958.60 3,979.07 3,940.86 3,950.98 33.76 0.85

DAX 7,205.13 7,208.48 7,115.48 7,163.47 49.38 0.69

 Asian Markets

Nikkei 225 9,514.16 9,588.70 9,493.44 9,521.94 -40.11 -0.42

Straits Times 3,126.41 3,154.52 3,125.49 3,135.52 11.82 0.38

Hang Seng 22,939.95 23,150.60 22,859.98 23,118.07 217.28 0.94

Taiwan Weighted 8,806.29 8,860.03 8,803.59 8,810.00 21.60 0.25

KOSPI 2,087.36 2,111.36 2,085.24 2,100.24 8.33 0.40

 SET Composite 1,067.87 1,069.94 1,064.40 1,067.00 1.55 0.15

 Jakarta Composite 3,814.72 3,835.46 3,790.90 3,832.38 17.56 0.46

Shanghai Composite 2,739.39 2,746.84 2,708.55 2,709.95 -26.58 -0.98

SGX Nifty 5,389.00 5,493.50 5,389.00 5,489.00 17.00 0.31

SENSEX 18266.10    221.46NIFTY  5476.10    63.75

Commodity Prices (MCX)

Commodity Rs. Unit

Gold 22514 10 grams

Silver 57520 kg

Crude Oil 4552 barrel

Natural Gas 197.4 mmbtu

Aluminium 118.95 kg

Copper 417.35 kg

Nickel 1045.9 kg

Lead 114 kg

Zinc 101.9 kg

Commodity markets are markets where raw or primary products

are exchanged. These raw commodities are traded on
regulated commodities exchanges, in which they are bought and
sold in standardized contracts.
This article focuses on the history and current debates regarding
global commodity markets. It covers physical product (food, metals,
electricity) markets but not the ways that services, including those
of governments, nor investment, nor debt, can be seen as a
commodity. Articles on reinsurance markets,stock markets, bond
markets and currency markets cover those concerns separately
and in more depth. One focus of this article is the relationship
between simple commodity money and the more complex
instruments offered in the commodity markets.
See List of traded commodities for some commodities and
their trading units and places.
Contents
 [hide]

1 History
o 1.1 Early history of commodity markets

2 Size of the market

3 Commodities trading
o 3.1 Spot trading

o 3.2 Forward contracts

o 3.3 Futures contracts

o 3.4 Hedging

o 3.5 Delivery and condition guarantees

4 Standardization

5 Regulation of commodity markets

o 5.1 Oil

o 5.2 Commodity markets and protectionism

6 Commodities exchanges
o 6.1 Largest commodities exchanges

7 See also
o 7.1 Commodity Exchanges

o 7.2 Supervising Commission

o 7.3 Related Software

8 References

[edit]History

The modern commodity markets have their roots in the trading of

agricultural products. While wheat and corn, cattle and pigs, were
widely traded using standard instruments in the 19th century in the
United States, other basic foodstuffs such as soybeans were only
added quite recently in most markets.[citation needed] For a commodity
market to be established, there must be very broad consensus on
the variations in the product that make it acceptable for one
purpose or another.
The economic impact of the development of commodity markets is
hard to overestimate. Through the 19th century "the exchanges
became effective spokesmen for, and innovators of, improvements
in transportation, warehousing, and financing, which paved the way
to expanded interstate and international trade."[citation needed]
[edit]Early history of commodity markets
Historically, dating from ancient Sumerian use of sheep or goats,
other peoples using pigs, rare seashells, or other items
as commodity money, people have sought ways to standardize
and trade contracts in the delivery of such items, to render trade
itself more smooth and predictable.[citation needed]
Commodity money and commodity markets in a crude early form
are believed to have originated in Sumerwhere small baked clay
tokens in the shape of sheep or goats were used in trade. Sealed
in clay vessels with a certain number of such tokens, with that
number written on the outside, they represented a promise to
deliver that number. This made them a form of commodity money -
more than an I.O.U. but less than a guarantee by a nation-state or
bank. However, they were also known to contain promises of time
and date of delivery - this made them like a modern futures
contract. Regardless of the details, it was only possible to verify the
number of tokens inside by shaking the vessel or by breaking it, at
which point the number or terms written on the outside became
subject to doubt. Eventually the tokens disappeared, but the
contracts remained on flat tablets. This represented the first system
of commodityaccounting.[citation needed]
Classical civilizations built complex global markets trading gold or
silver for spices, cloth, wood and weapons, most of which had
standards of quality and timeliness. Considering the many hazards
of climate, piracy, theft and abuse of military fiat by rulers of
kingdoms along the trade routes, it was a major focus of these
civilizations to keep markets open and trading in these scarce
commodities. Reputation and clearing became central concerns,
and the states which could handle them most effectively became
very powerful empires, trusted by many peoples to manage and
mediate trade and commerce.[citation needed]
[edit]Size of the market
The trading of commodities consists of direct physical trading and
derivatives trading. Exchange traded commodities have seen an
upturn in the volume of trading since the start of the decade. This
was largely a result of the growing attraction of commodities as an
asset class and a proliferation of investment options which has
made it easier to access this market.
The global volume of commodities contracts traded on exchanges
increased by a fifth in 2010, and a half since 2008, to around 2.5
billion million contracts. During the three years up to the end of
2010, global physical exports of commodities fell by 2%, while the
outstanding value of OTC commodities derivatives declined by
two-thirds as investors reduced risk following a five-fold increase in
value outstanding in the previous three years. Trading on
exchanges in China and India has gained in importance in recent
years due to their emergence as significant commodities
consumers and producers. China accounted for more than 60% of
exchange-traded commodities in 2009, up on its 40% share in the
previous year.
Commodity assets under management more than doubled
between 2008 and 2010 to nearly $380bn. Inflows into the sector
totalled over $60bn in 2010, the second highest year on record,
down from the record $72bn allocated to commodities funds in the
previous year. The bulk of funds went into precious metals and
energy products. The growth in prices of many commodities in
2010 contributed to the increase in the value of commodities funds
under management.[1]
[edit]Commodities trading
[edit]Spot trading
Spot trading is any transaction where delivery either takes place
immediately, or with a minimum lag between the trade and delivery
due to technical constraints. Spot trading normally involves visual
inspection of the commodity or a sample of the commodity, and is
carried out in markets such as wholesale markets. Commodity
markets, on the other hand, require the existence of agreed
standards so that trades can be made without visual inspection.
[edit]Forward contracts
A forward contract is an agreement between two parties to
exchange at some fixed future date a given quantity of a
commodity for a price defined today. The fixed price today is
known as the forward price.
[edit]Futures contracts
A futures contract has the same general features as a forward
contract but is transacted through a futures exchange.
Commodity and futures contracts are based on what’s termed
forward contracts. Early on these forward contracts — agreements
to buy now, pay and deliver later — were used as a way of getting
products from producer to the consumer. These typically were only
for food and agricultural products. Forward contracts have evolved
and have been standardized into what we know today as futures
contracts. Although more complex today, early forward contracts
for example, were used for rice in seventeenth century Japan.
Modern forward, or futures agreements, began in Chicago in the
1840s, with the appearance of the railroads. Chicago, being
centrally located, emerged as the hub between Midwestern
farmers and producers and the east coast consumer population
centers.
In essence, a futures contract is a standardized forward contract in
which the buyer and the seller accept the terms in regards to
product, grade, quantity and location and are only free to negotiate
the price.[2]
[edit]Hedging

Hedging, a common (and sometimes mandatory[citation needed]) practice

of farming cooperatives, insures against a poor harvest by
purchasing futures contracts in the same commodity. If the
cooperative has significantly less of its product to sell due to
weather or insects, it makes up for that loss with a profit on the
markets, since the overall supply of the crop is short everywhere
that suffered the same conditions.
Whole developing nations may be especially vulnerable, and even
their currency tends to be tied to the price of those particular
commodity items until it manages to be a fully developed nation.
For example, one could see the nominally fiat money of Cuba as
being tied to sugar prices[citation needed], since a lack of hard currency
paying for sugar means less foreign goods per peso in Cuba itself.
In effect, Cuba needs a hedge against a drop in sugar prices, if it
wishes to maintain a stable quality of life for its citizens.[citation needed]
[edit]Delivery and condition guarantees
In addition, delivery day, method of settlement and delivery
point must all be specified. Typically, trading must end two (or
more) business days prior to the delivery day, so that the routing of
the shipment can be finalized via ship or rail, and payment can be
settled when the contract arrives at any delivery point.
[edit]Standardization

U.S. soybean futures, for example, are of standard grade if they

are "GMO or a mixture of GMO and Non-GMO No. 2 yellow
soybeans of Indiana, Ohio and Michigan origin produced in the
U.S.A. (Non-screened, stored in silo)," and of deliverable grade if
they are "GMO or a mixture of GMO and Non-GMO No. 2 yellow
soybeans of Iowa, Illinois and Wisconsin origin produced in the
U.S.A. (Non-screened, stored in silo)." Note the distinction between
states, and the need to clearly mention their status as GMO
(Genetically Modified Organism) which makes them unacceptable
to most organic food buyers.
Similar specifications apply for cotton, orange juice, cocoa, sugar,
wheat, corn, barley, pork bellies, milk, feedstuffs, fruits, vegetables,
other grains, other beans, hay, other livestock, meats, poultry,
eggs, or any other commodity which is so traded.
[edit]Regulation of commodity markets
Cotton, kilowatt-hours of electricity, board feet of wood, long
distance minutes, royalty payments due on artists' works, and other
products and services have been traded on markets of varying
scale, with varying degrees of success.[citation needed]
Generally, commodities' spot and forward prices are solely
dependent on the financial return of the instrument, and do not
factor into the price any societal costs, e.g. smog, pollution, water
contamination, etc. Nonetheless, new markets and instruments
have been created in order to address the external costs of using
these commodities such as man-made global warming,
deforestation, and general pollution. For instance, many utilities
now trade regularly on the emissions markets, buying and selling
renewable emissions credits and emissions allowances in order to
offset the output of their generation facilities. While many have
criticized this as a band-aid solution, others point out that the utility
industry is the first to publicly address its external costs. Many
industries, including the tech industry and auto industry, have done
nothing of the sort.
In the United States, the principal regulator of commodity and
futures markets is the Commodity Futures Trading Commission but
it is the National Futures Association that enforces rules and
regulations put forth by the CFTC.
[edit]Oil

Building on the infrastructure and credit and settlement networks

established for food and precious metals, many such markets have
proliferated drastically in the late 20th century. Oil was the first form
of energy so widely traded, and the fluctuations in the oil markets
are of particular political interest.
Some commodity market speculation is directly related to the
stability of certain states, e.g. during the Persian Gulf War,
speculation on the survival of the regime of Saddam
Hussein in Iraq. Similar political stability concerns have from time
to time driven the price of oil.
The oil market is an exception. Most markets are not so tied to the
politics of volatile regions - even natural gas tends to be more
stable, as it is not traded across oceans by tanker as extensively.
[edit]Commodity markets and protectionism
Developing countries (democratic or not) have been moved to
harden their currencies, accept IMF rules, join the WTO, and
submit to a broad regime of reforms that amount to a hedge
against being isolated. China's entry into the WTO signalled the
end of truly isolated nations entirely managing their own currency
and affairs. The need for stable currency and predictable clearing
and rules-based handling of trade disputes, has led to a global
trade hegemony - many nations hedging on a global scale against
each other's anticipatedprotectionism, were they to fail to join
the WTO.
There are signs, however, that this regime is far from perfect. U.S.
trade sanctions against Canadian softwood lumber (within NAFTA)
and foreign steel (except for NAFTA partners Canada and Mexico)
in 2002 signalled a shift in policy towards a tougher regime
perhaps more driven by political concerns - jobs, industrial policy,
even sustainable forestry and logging practices.
[edit]Commodities exchanges
Main article: Commodities exchange
[edit]Largest commodities exchanges
Exchange Country Volume per month $M
CME Group USA 19[3]
Tokyo Commodity Exchange Japan -
NYSE Euronext EU -
Dalian Commodity Exchange China -
Multi Commodity Exchange India -
Intercontinental Exchange USA, Canada, China, UK -
[edit]