Commodities

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Commodities: green, white and black pepper

Commodities ( English plural of "commodity", used in the plural ; [ kəmɑːdətiːs ]) is a Anglizismus for to exchange traded, standardized and in the single kind homogeneous commodities . This can include raw materials , agricultural products as well as standardized capital goods and consumer goods .

General

The term, which comes from late Middle English , goes back to “convenience” ( Latin commoditas ) and “comfortable” ( Latin commodus ). The prerequisites for the tradability of commodities on exchanges are a high degree of standardization , fungibility and conformity (as with Brent Blend or gold bars ). As a result, they do not have to be present on exchanges - as is typically the case with goods on markets - because the buyer can expect a product of constant quality that is quantitatively available in fixed units . Within their genus they have little or no quality differences and no differentiation potential . This enables the use of common trading techniques and organization for financial instruments . That is why financial contracts such as spot transactions with spot rates , futures transactions with forward rates are applicable to commodities , there are stock exchanges and stock exchange supervision , trading practices and trading strategies .

history

The stock exchange standardization of agricultural products originated in the USA . There the Chicago Board of Trade started a cash market for grain in April 1848 . In 1858, futures contracts - which were called differently at that time ( English "to-arrive contracts" ) - were standardized in particular to ensure the quality of grain. In October 1865 there were formal trade rules, particularly on the delivery obligations of the seller. The New York Cotton Exchange began in September 1870, followed by the Butter and Cheese Exchange of New York in May 1872, the predecessor of today's New York Mercantile Exchange (NYMEX); the Coffee, Sugar and Cocoa Exchange was established in March 1882. The first metal exchange opened in January 1877, the London Metal Exchange, which still exists today .

In July 1898, the taxation of cash and forward transactions began in the USA. In August 1914, the Cotton Futures Act on cotton futures came into force, followed in August 1921 by the more general Futures Trading Act on futures in all grains. The merger of the National Metal Exchange , Rubber Exchange of New York , National Raw Silk Exchange and the New York Hide Exchange created the Commodity Exchange in January 1933 , which has been a subsidiary of NYMEX since 1994 . With metals, rubber and raw silk, it combined the most diverse base values in one exchange. In August 1958, a ban stopped futures trading in onions . In February 1968, the Commodity Exchange Act to livestock and livestock products ( pork bellies , English pork bellies ) in July 1968 to orange juice concentrates extended. The Hanover commodity futures exchange was founded in July 1996 as a futures exchange for agricultural products and is the first fully computerized futures exchange in Germany. The European Energy Exchange was established in March 2002 and is a marketplace for energy and energy-related products.

Scope and types

The scope of the term commodities was and is still not uniform in its use. For a long time, agricultural goods were associated with commodities in Germany. According to Tietje / Götting / Gruber / Lüdemann u. a. (2015), on the other hand, actually only equated raw materials with commodities; an advancing commoditization today assigns more and more goods the status of commodities.

According to a common version of the term, commodities can be divided into three categories: agricultural products, metals and energy :

In the more recent specialist literature , a distinction is made between the subspecies soft commodities and hard commodities . Soft commodities are goods that are grown or kept as livestock (coffee, cotton, cattle), while hard commodities refer to degradable goods (gold, silver, copper, petroleum).

The US American Commodities Exchange Act (CEA) now also includes stock indices , currencies or US federal bonds ( USC Title 7, Sec. 1a (4), (13)).

Trading strategies

The trading strategies of financial management are also applied to commodities. Hedging , arbitrage and speculation are also possible with commodities.

Spot prices reflect immediate fulfillment , while futures trading goods incur storage costs that increase transaction costs. The spread between the spot rate ( English spot price ) and forward rate ( English forward price ) includes at Commodities capital costs and storage costs and the premium for the immediate availability of the underlying. In the case of commodities, there is often a market situation known as backwardation or deport market, in which the market value predominates for immediate availability and therefore the spot rates are higher than the forward rates. The opposite with higher forward rates is called contango ; both are suitable for speculation and arbitrage. The backwardation effect was described in 1930 by John Maynard Keynes , who assumed that companies want to hedge against falling commodity prices through forward sales and are willing to pay a premium to the buyer. Since the supply of forward sales exceeds the demand for forward purchases, forward rates are lower than the spot rates.

It is debated whether or not speculation affects commodity prices. Rising food prices as a result of speculation would increase poverty in emerging countries and also affect many low- income earners in industrialized countries . In an empirical analysis of the prices of agricultural commodities in the period 2006-2013 on the futures markets, economists from the Institute for the World Economy came to the conclusion in March 2014 that actors only contributed to price increases for cocoa and live cattle through their activities in the futures markets . For all other agricultural commodity markets examined, however, no influence of speculative activities on commodity prices can be proven with the applied analysis methods. The Petroleum Industry According to about 90% of but are market participants in the trading of oil futures speculation involved and have no interest in the ownership of the oil, but try from price changes gains to achieve.

Delimitations

Commodities are only a sub-segment of the trading goods . For example, coffee in the standardized raw form ( sack of Robusta coffee , trading unit: 60 kg) is one of the commodities, whereas the 500 g pack of roasted coffee in the supermarket is a commodity. Under commoditization one's trend of propagating the species to understand tradable items, such as in banking, the increasing standardization of banking products and services. Commodities form the base value for various derivative financial instruments ( English commodity derivatives ).

Individual evidence

  1. ↑ Ted P. Schmidt, The Political Economy of Food and Finance , 2015, o. P.
  2. ↑ Ulrich Becker, Lexicon futures trading: Finanz und Rohstoff-Futures , 1994, p. 138
  3. ↑ Christian Tietje / Horst-Peter Götting / Urs Peter Gruber / Jörn Lüdemann u. a. (Ed.), Internationales Wirtschaftsrecht , 2015, p. 298
  4. ↑ Otto Palandt / Walter Weidenkaff, BGB Commentary , 73rd edition, 2014, § 433 Rn. 8 and § 453 marginal no. 6th
  5. ↑ Heribert Meffert , Commodities , in: Hermann Diller (Ed.), Vahlens Großes Marketing-Lexikon , 2001, p. 158
  6. ↑ Marc Engelbrecht, Asset Allocation in Private Banking , 2015, p. 144
  7. ^ John Maynard Keynes, A Treatise on Money , 1930, p. 143
  8. ↑ Institute for the World Economy, speculation has no influence on raw material prices , media information from March 11, 2014
  9. ↑ Mineralölwirtschaftsverband e. V., Pricing on the Crude Oil Market , 2004, p. 39
  10. ↑ Wolfgang Grill / Ludwig Gramlich / Roland Eller (eds.), Gabler Bank Lexicon: Bank, Börse ,finanz , 1996, p. 361