Date Added: Jul 2009
Commodity markets are in a remarkable state of flux. Changes in the balance of supply and demand are a part of the reason, but so is the increased use of commodity based financial derivatives among institutional investors. Historically, the primary users of financial derivatives in commodity markets have been those who eventually take possession of the commodity, such as cheese producers in the dairy market and coffee bean processors in the coffee bean market. However, the introduction of more and more commodities to exchanges, along with a troubled stock market, has shifted the equilibrium.