This post was updated on October 6th, 2018
What is a Commodity Market?
Commodity markets deal in soft commodities and hard commodities. Soft commodities are basically renewable and include cocoa, coffee, sugar, rice, soybeans, cotton and lumber. Hard commodities are generally fossil fuels, metals and other such products.
What is Commodity exchange?
A commodity exchange is an exchange where various commoditie derivative products, agricultural products and other raw material are traded.
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 and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures.
Commodity exchanges deal in standard contracts.
Commodities comprise of standardized products which have been graded according to quality.
These products are valuable commodities produced in large quantities according to the demand that is created in a market.
The exchange is represented by a central authority where trading takes place.
There is a physical location for this exchange and is an incorporated entity and acts as a non-profit organization that is in place to enforce rules, regulations and procedures.
Commodities and Futures
The terms “commodities” and “futures” are often used to describe commodity trading or futures trading.
A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future.
Buyers use such contracts to avoid the risks associated with the price fluctuations.
Sellers use futures contracts to lock in guaranteed prices for their products.
Speculators and investors also buy and sell the futures contracts in attempt to make a profit and provide liquidity to the system.
What are the types of commodity exchange?
Commodities exchanges across the world
Most commodity exchanges are located in Japan, Chicago, New York and several European locations.
Commodity markets are located all over the globe.
You can see futures contracts taking place in commodity markets where two parties agree to exchange the commodity in the future on a specific date at a pre-set price. This means that the price fluctuations in the market do not have an effect on this type of contract and the agreement will be concluded on the delivery date.
The producer of the commodity can lock in the price and be assured of that amount of return on the delivery date ensuring that his trade is stable.
Speculating in the commodity markets by third parties have gained in popularity. Investors buy and sell futures contracts in financial markets and this can be a profitable way of diversifying a portfolio. Commodity markets are not as popular as the stock market or the Forex market although some investors have started trading in commodity contracts.
Best known commodity exchanges in the United States
The Chicago Mercantile Exchange (CME) Group
The Chicago Mercantile Exchange (often called “the Chicago Merc“, or “the Merc“) is an American financial and commodity derivative exchange based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an agricultural commodities exchange. Originally, the exchange was a non-profit organization.
The New York Mercantile Exchange (NYMEX)
(NYMEX) which is a part of the CME Group. CME Group is the world’s leading and most diverse derivatives marketplace, handling 3 billion contracts worth approximately $1 quadrillion annually.
Commodities exchanges across the world
|Brazilian Mercantile and Futures Exchange||BMF||São Paulo, Brazil||Agricultural, Biofuels, Precious Metals|
|Chicago Board of Trade (CME Group)||CBOT||Chicago, United States||Grains, Ethanol, Treasuries, equity index, Metals|
|Chicago Mercantile Exchange (CME Group)||CME||Chicago, United States||Meats, Currencies, Eurodollars, equity index|
|Chicago Climate Exchange||CCX||Chicago, United States||Emissions|
|Flett Exchange||Jersey City, United States||Environmental|
|HedgeStreet Exchange||California, United States||Energy, industrial Metals|
|HoustonStreet Exchange||New Hampshire, United States||Crude Oil, Distillates|
|Intercontinental Exchange||ICE||Atlanta, United States||Energy, Emissions, Agricultural, Biofuels|
|Kansas City Board of Trade||KCBT||Kansas City, United States||Agricultural|
|Memphis Cotton Exchange||Memphis, United States||Agricultural|
|Mercado a Término de Buenos Aires||MATba||Buenos Aires, Argentina||Agricultural|
|Mercado a Término de Rosario||ROFEX||Rosario, Argentina||Financial, Agricultural|
|Minneapolis Grain Exchange||MGEX||Minneapolis, United States||Agricultural|
|Nadex Exchange||Chicago, United States||Energy, industrial Metals|
|Nodal Exchange||Virginia, United States||Energy|
|New York Mercantile Exchange (CME Group)||NYMEX||New York, United States||Energy, Precious Metals, Industrial Metals|
|U.S. Futures Exchange||USFE||Chicago, United States||Energy|
|Winnipeg Commodity Exchange||ICE||Winnipeg, Canada||Agricultural|
|Africa Mercantile Exchange||AfMX||Nairobi, Kenya||Agricultural, Energy|
|Egyptian Commodities Exchange||EGYCOMEX||Cairo, Egypt||Agricultural, Energy|
|Nairobi Coffee Exchange||NCE||Nairobi, Kenya||Coffee|
|Ethiopia Commodity Exchange||ECX||Addis Ababa, Ethiopia||Agricultural|
|Mercantile Exchange of Madagascar||MEX||Antananarivo, Madagascar||Agricultural, Metals, Energy|
|East Africa Exchange||EAX||Kigali, Rwanda||Agricultural|
|Agricultural Commodity Exchange for Africa||ACE||Lilongwe, Malawi||Agricultural|
|Auction Holding Commodity Exchange||AHCX||Lilongwe, Malawi||Agricultural|
|Bourse Africa||Ebene City, Mauritius||Metals, Forex|
|South African Futures Exchange (part of JSE Limited)||JSE||Sandton, South Africa||Agricultural|
|Abuja Securities and Commodity Exchange||ASCE||Abuja, Nigeria||Agricultural products|
|Exchange||Abbreviation||Location||Product Types||Life Time|
|Trieste Commodity Exchange||BMTS||Trieste, Italy||Agricultural|
|Commodity Exchange Bratislava, JSC||CEB||Bratislava, Slovakia||Emissions, Agricultural, Diamonds|
|Deutsche Börse/Eurex||DBAG/EUREX||Frankfurt, Germany||Agricultural, Metals, ETCs, Commodities Index|
|European Climate Exchange||ECX||London, UK||Emissions||founded in 2005, acquired by ICE in 2010 and merged into ICE Futures Europe|
|European Energy Exchange||EEX||Leipzig, Germany||Power, Natural Gas, Emissions, Coal|
|Energy Exchange Austria||EXAA||Vienna, Austria||Energy, Emissions|
|Commodities Investment Exchange||COINVEX||London, England||Oil & Gas, Mining, Renewable Energy|
|Integrated Nano-Science & Commodity Exchange||INSCX||United Kingdom||Nanomaterials|
|London Commodity Exchange||LCE||London, UK||Agricultural||Merged into LIFFE in 1996|
|Nasdaq Commodities||Oslo, Norway||Power, Natural Gas, Emissions, Freight, Iron Ore|
|Nord Pool Spot||Oslo, Norway||Power, Energy|
|NYSE Liffe||LIFFE||Europe||Agricultural||Founded in 1982, merged into Euronext in 2002|
|London Metal Exchange||LME||London, UK||Industrial Metals, Plastics (Delisted in 2011)|
|Power Exchange Centra Europe||PXE||Prague, Czech Republic||Power|
|Belarusian Universal Commodity Exchange||BUCE||Minsk, Belarus||Metals, Agricultural, Timber, Industrial and consumer goods|
|Saint-Petersburg International Mercantile Exchange||SPIMEX||Moscow, Russia||Crude oil, Petrochemicals, Natural gas, Metals, Agricultural, Timber|
|Moscow Energy Exchange||MOSENEX||Moscow, Russia||Energy||Closed since March 2017|
|Manila Commodity Exchange||MCX||Manila Philippines||commodities, futures contracts and options contracts on various base metals, agriculture commodities, energy, and currencies|
|International Commodity Exchange Kazakhstan||Almaty Kazakhstan||Industrial and Mineral Products, Oil By-products and Petrochemicals, Agricultural|
|Agricultural Futures Exchange of Thailand||AFET||Bangkok Thailand||Agricultural|
|Bangla Mercantile Exchange|
|Cambodian Mercantile Exchange||CMEX||Phnom Penh, Cambodia||Energy, Industrial Metals, Rubber, Precious Metals, Agricultural|
|Central Japan Commodity Exchange||Nagoya, Japan||Energy, Industrial Metals, Rubber|
|Chittagong Tea Auction||Chittagong, Bangladesh||Tea|
|Dalian Commodity Exchange||DCE||Dalian, China||Agricultural, Plastics, Energy|
|Dubai Mercantile Exchange||DME||Dubai||Energy|
|Dubai Gold & Commodities Exchange||DGCX||Dubai||Precious Metals|
|Hong Kong Mercantile Exchange||HKMEx||Hong Kong||Gold, Silver|
|Indonesia Commodity and Derivatives Exchange||ICDX||Jakarta, Indonesia||Agricultural Products, Base Metals, Financial Products|
|Iran Energy Exchange||IRENEX||Tehran, Iran||All energy carriers such as crude oil, petroleum products, electricity, coal…|
|Iran Mercantile Exchange||IME||Tehran, Iran||Industrial and Mineral Products, Oil By-products and Petrochemicals, Agricultural|
|Jakarta Futures Exchange||JFX||Jakarta, Indonesia||Cocoa, Arabica and Robusta Coffee, Precious Metals, Olein, CPO, Coal, Tea, and Rubber|
|Kansai Commodities Exchange||KANEX||Osaka, Japan||Agricultural|
|Commodities & Metal Exchange Nepal Ltd.||COMEN||Nepal||Gold, Silver|
|National Spot Exchange Limited||[NSEL]||Mumbai, India|
|Nepal Derivative Exchange Limited||[NDEX]||Kathmandu, Nepal||Agricultural, Precious Metals, Base Metals, Energy|
|Derivative and Commodity Exchange Nepal Ltd.||DCX||Kathmandu, Nepal||Agricultural, Bullion, Base Metals, Energy|
|MEX Nepal||MEX||Kathmandu, Nepal||Agricultural, Bullion, Base Metals, Energy|
|Nepal Spot Exchange Limited||NSE||Kathmandu, Nepal||Agricultural, Bullion|
|Indian Commodity Exchange Limited||ICEX||India||Energy, Precious Metals, Base Metals, Agricultural|
|Multi Commodity Exchange||MCX||India||Precious Metals, Base Metals, Energy, Agricultural|
|National Commodity and Derivatives Exchange||NCDEX||India||Precious Metals, Base Metals, Energy, Agricultural|
|National Multi-Commodity Exchange of India Ltd||NMCE||India||Precious Metals, Base Metals, Agricultural|
|Chamber of Commerce, Hapur||COC||India||Agricultural|
|Ace Derivatives & Commodity Exchange Ltd.||ACE||India||Agricultural|
|Bhatinda Om & Oil Exchange Ltd.||BOOE||India||Agricultural|
|Universal Commodity Exchange||UCX||India||Agricultural, Energy, Precious Metals|
|Pakistan Mercantile Exchange||PMEX||Pakistan||Precious Metals, Agricultural Products, Energy, Interest Rate Future, FX, Metals|
|Shanghai Futures Exchange||Shanghai, China||Industrial metals, Gold, Petrochemicals, Rubber, Base metals|
|Shanghai Gold Exchange||Shanghai, China||Precious Metals|
|Singapore Commodity Exchange||SICOM||Singapore||Agricultural, Rubber|
|Singapore Mercantile Exchange||SMX||Singapore||Precious Metals, Base Metals, Agricultural, Energy|
|Uzbek Commodity Exchange||UZEX||Tashkent, Uzbekistan||Metals, crude oil products, chemicals, base oils, LPG and polyethylene, sugar, agricultural, etc.|
|Tokyo Commodity Exchange||TOCOM||Tokyo, Japan||Energy, Precious Metals, Industrial Metals, Agricultural|
|Tokyo Grain Exchange||TGE||Tokyo, Japan||Agricultural|
|Zhengzhou Commodity Exchange||CZCE||Zhengzhou, China||Agricultural, PTA|
|Vietnam Commodity Exchange||VNX||Ho Chi Minh city, Vietnam||Coffee, Rubber, Steel|
|Buon Ma Thuot Coffee Exchange Center||BCEC||Buon Ma Thuot, Vietnam||Coffee|
|Mongolian Agricultural Commodity Exchange||MCE||Ulaanbaatar city, Mongolia||Agricultural|
By: A Dababneh