The presentation is covering the whole North America Commodity Market.
Citation preview
1. COMMODITY MARKETS IN NORTH AMERICA
2. COMMODITY MARKET Commodity market is a place where trading
in commodities takes place. It is similar to an Equity market, but
instead of buying or selling shares one buys or sells commodities.
Commodity markets began with the trading of agricultural products,
such as wheat, corn, cattle, etc. in the 19th century.
3. COMMODITY EXCHANGE An entity, usually an incorporated
association, that determines and enforces rules and procedures for
the trading of commodities and related investments, such as
commodity futures. Commodities exchange also refers to the physical
center where trading takes place.
4. COMMODITY EXCHANGES IN UNITED STATES
5. HISTORY In 1872, a group of Manhattan Diary Merchants formed
the Butter and Cheese Exchange. Subsequently, egg traders joined
and the exchange was renamed as Butter, Cheese and Egg
Exchange.
6. In 1933, the Commodity Exchange(COMEX)was established
through the merger of four small exchanges the National Metal
Exchange, the Rubber Exchange of New York, the National Raw Silk
Exchange, and the New York Hide Exchange.
7. On August 3, 1994, New Yorks two largest exchanges, the New
York Mercantile Exchange and the Commodity Exchange, merged to
become the worlds largest physical commodity futures exchange. It
is regulated by the Commodities Futures Trading Commission, an
agency of the US government.
8. COMMODITIES TRADED (NYMEX Division) Energy products Crude
Oil Heating Oil Gasoline Natural Gas Electricity Propane
10. CHICAGO MERCANTILE EXCHANGE (CME) The Chicago Mercantile
Exchange (CME) (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.
11. Originally, the exchange was a non-profit organization. The
Merc demutualized in November 2000, went public in December 2002,
and merged with the Chicago Board of Trade in July 2007 to become a
designated contract market of the CME Group Inc., which operates
both markets. The chief executive officer of CME Group is Phupinder
Gill, Terrence A. Duffy is the president and executive chairman of
the board, and Leo Melamed is chairman emeritus.
12. CONT. On August 18, 2008, shareholders approved a merger
with the New York Mercantile Exchange (NYMEX) and COMEX. The Merc,
CBOT, NYMEX and COMEX are now markets owned by the CME Group.
Today, the Merc trades several types of financial instruments:
interest rates, equities, currencies, and commodities.
13. It also offers trading in alternative investments, such as
weather and real estate derivatives, and has the largest options
and futures contracts open interest (number of contracts
outstanding) of any futures exchange in the world. Trading is
conducted in two methods; an open outcry format and the CME Globex
electronic trading platform. Approximately 80 percent of total
volume at the exchange occurs electronically on CME Globex.
14. COMMODITIES Agriculture commodity contracts include : 1.
Live cattle. 2. Lean hogs. 3. Feeder cattle. 4. Class iv milk. 5.
Frozen pork bellies. 6. International Skimmed Milk Powder (ISM). 7.
Nonfat Dry Milk. 8. Cash-Settled Butter. 9. Butter, Random Length
Lumber, Softwood Pulp, Hardwood Pulp etc.
15. CHICAGO BOARD OF TRADE (CBT) The Chicago Board of Trade
(CBOT), established in 1848, is the world's oldest futures and
options exchange. More than 50 different options and futures
contracts are traded by over 3,600 CBOT members through open outcry
and electronic trading. Volumes at the exchange in 2003 were a
record breaking 454 million contracts.
16. CONTD On 12 July 2007, the CBOT merged with the Chicago
Mercantile Exchange (CME) to form the CME Group, a CME/Chicago
Board of Trade Company. CBOT and three other exchanges (CME, NYMEX,
and COMEX) now operate as designated contract markets (DCM) of the
CME Group. The concerns of U.S. merchants to ensure that there were
buyers and sellers for commodities have resulted into forward
contracts to sell and buy commodities. Still, credit risk remained
a serious problem.
17. CONTD In 1864, the CBOT listed the first ever standardized
"exchange traded" forward contracts, which were called futures
contracts. In 1919, the Chicago Butter and Egg Board, a spin-off of
the CBOT, was reorganized to enable member traders to allow future
trading, and its name was changed to Chicago Mercantile Exchange
(CME). On October 19, 2005, the initial public offering (IPO) of
3,191,489 CBOT shares was priced at $54.00 (USD) per share.
18. CONTD On its first day of trading the stock closed up +49%
at $80.50 (USD) on the NYSE. In 2007, the CBOT and the CME merged
to form the CME Group. In 2012, the CBOT expanded electronic
trading hours to 22 hours per day to become more competitive in the
industry. The open outcry hours remained the same.
21. INTRODUCTION The Minneapolis Grain Exchange (MGEX) was
formed in 1881 in Minneapolis Founded as the Minneapolis Chamber of
Commerce in 1881, the MGEX has been a marketplace for producers,
processors and millers for more than 125 years. The Minneapolis
Chamber of Commerce opened as a regional cash marketplace to
promote fair trade and to prevent trade abuses in wheat, oats and
corn.
22. In 1883, the Chamber of Commerce introduced its first
futures contract: Hard Red Spring Wheat. This contract was launched
to address price risk management needs of buyers and sellers of
spring wheat and still trades today. In 1947, the exchange was
renamed the Minneapolis Grain Exchange. Today the exchange uses
MGEX
23. MGEX has been the principal market for Hard Red Spring
Wheat (HRSW) since 1881 offering futures and options contracts
based on its unique commodity HRSW is one of the highest - protein
wheat MGEX offers five financially settled agricultural index
products
24. MGEX offers five financially settled agricultural index
products: 1. Hard Red Spring Wheat Index (HRSI), 2. Hard Red Winter
Wheat Index (HRWI), 3. Soft Red Winter Wheat Index (SRWI), 4.
National Corn Index (NCI) and 5. National Soybean Index (NSI).
25. Hard Red Spring Wheat Hard red spring wheat is one of the
highest protein wheat grown and is sought by millers because of its
high quality. It is found in bagels, high quality breads and
cereals.
26. Wheat is the principal U.S. cereal grain for export and
domestic consumption. There are several hundred varieties of wheat
produced in the United States Wheat grown depends largely upon
rainfall, temperature, soil conditions and tradition
27. DIFFERENT TYPES OF WHEAT HARD RED WINTER HARD RED
SPRING
28. SOFT RED WINTER DURUM
29. HARD WHITE WHEAT SOFT WHITE WHEAT
30. WINNIPEG COMMODITY EXCHANGE
31. Winnipeg Commodity Exchange The Winnipeg Commodity Exchange
is the former name of a derivatives exchange based in Winnipeg,
Manitoba, Canada now known as ICE Futures Canada. Futures and
options contracts are electronically traded in western barley and
canola . The WCE began its existence as the Winnipeg Grain &
Produce Exchange in 1887. In 1904, it introduced its first futures
contracts. It was, and remains, Canada's only commodity futures
exchange. It also formerly operated the Canadian Financial Futures
Market.
32. In December 2004, WCE converted from the traditional open
outcry" method of trading to an electronic trading format. This
made it the first commodity futures exchange in North America to go
fully electronic. Until December 2007, futures were traded on the
platform of the Chicago Board of Trade. Winnipeg commodity exchange
trades in feed wheat, western barley, canola and flaxseed.
33. INTERCONTINENTAL EXCHANGE History of (ICE) Jeffrey c
sprecher It offered
36. HISTORY OF U.S. CFTC. Futures contracts for agricultural
commodities have been traded in the United States for more than 150
years and have been under Federal regulation since the 1920s. When
the CFTC was created in 1974 with the enactment of the Commodity
Futures Trading Commission Act, most futures trading took place in
the agricultural sector. Over the years, the futures industry has
become increasingly varied and complex. Significant dates in the
history of futures regulation before the creation of the CFTC and
significant dates in CFTC history from 1974 to the present are
given here.
37. ABOUT CFTC. Founded 1974 Acting Chairman Mark Wetjen.
Branch Of Government Executive. Location Washington D.C. , New York
, Chicago , Kansas City.
38. CFTC ORGANISATION. The CFTC organisation consists of the
Commissioners, the offices of the Chairman, and the agency's
operating units. The Commission consists of five Commissioners
appointed by the President, with the advice and consent of the
Senate, to serve staggered five-year terms. The President
designates one of the Commissioners to serve as Chairman. No more
than three Commissioners at any one time may be from the same
political party.
39. DIVISIONS DCR (Division of Clearing and Risk.) DOE
(Division Of Enforcement.) DMO (Division of Market Oversight.) DSIO
(Division of swap dealer and intermediary operations.)
40. COMMITTEES Agricultural Advisory committee. Energy and
environmental markets advisory committee. Global markets Advisory
Committee. Technology Advisory committee. CFTC-SEC Joint Advisory
Committee.
41. MISSION The mission of the Commodity Futures Trading
Commission (CFTC) is to protect market participants and the public
from fraud, manipulation, abusive practices and systemic risk
related to derivatives both futures and swaps and to foster
transparent, open, competitive and financially sound markets. In
carrying out this mission and to promote market integrity, the
Commission polices the derivatives markets for various abuses and
works to ensure the protection of customer funds.
