Commodity futures are generally traded before their expiration date.

Some believe that the crisis was amplified by speculative trading in commodity futures, which have become an integral part of food markets.

Successful commodity futures exchanges now operate across the developing world.

International commodity markets are under stress.

From a substantive viewpoint, these involved emphasizing, on the one hand, issues concerning risk management and futures markets, as a means to improving the functioning of commodity markets and on the other, issues of sustainable development and the relationship between commodity production and trade and the environment.

Recent initiatives by the US Commodity Futures Trading Commission point in the right direction.

Economists generally consider commodity futures to be the solution to higher price volatility, not its cause.

Commodity futures are formal agreements to buy or sell a specified amount of a commodity at a specified future date for a specified price.

An alternative for some commodity exporters is to hedge their risk by selling on the futures market.

But their presence has also raised concerns that speculation in commodity futures could result in higher price volatility.

They argue that traders of commodity futures merely react to price signals that ultimately depend on market fundamentals.

But history is not destined to repeat itself, and leaders of commodity rich countries are seeking alternative futures.

Another statistical limitation comes from the segmentation of commodity markets.

Furthermore, ample worldwide liquidity and the rise of other commodity prices induced market speculators to buy into oil futures.

Limiting or even banning speculation in futures markets might therefore be costly and have unintended consequences.

Such measures will contribute to shaping a more stable market environment and ensure that commodity futures reduce risks and volatility.

Oil is a fungible commodity, and markets clear at a common price.

Fourth, the commodity super cycle that helped Brazil, Russia, South Africa, and many other commodity exporting emerging markets may be over.

Given these findings, trading in futures markets seems to have amplified price volatility in the short term only.

They thus provide an important instrument for hedging price risks in commodity markets.

The futures markets on home prices will allow investors around the world to invest in US homes indirectly, by buying interests in them through these markets.

Until this month, the US Commodity Futures Trading Commission had been at odds with Barnier over the territorial scope of US derivatives rules.

Others spoke out as well, and the futures markets quickly predicted another 25 basis point rate hike in March.

For example, the recent spike in oil prices would have been driven by an irrational frenzy in futures markets.

Synthetic securities need to be similarly regulated, although the task could be assigned to a different authority, such as the Commodity Futures Trading Commission.

The current instability of global commodity markets and the sharp drop in commodity prices was thus a source of grave concern to those countries.

China s 4 trillion stimulus package, unveiled in November 2008, restored confidence in global commodity markets.

And emerging markets will suffer once the US contraction and global slowdown undermines commodity prices.

Commodity, currency and stock exchanges, as well as real estate markets, are being set up.

Given the important role that commodity futures play for many market participants, regulatory measures should aim at enhancing confidence in the functioning of the market.

Price volatility has also been high for commodities that are not traded in futures markets (copper, iron, and ore), or for which these markets are not important (steel and rice)

Europe s Two Futures

America s Opposing Futures

Two Energy Futures

Global Futures Network

futures UNU INRA

This is more prevalent in the US, where regulators salaries are very low, especially in the Securities and Exchange Commission and the Commodity Futures Trading Commission.

In fact, commodity futures have become increasingly appealing to non commercial investors, as their returns seem to be negatively correlated with returns on equities and bonds.

50. The developing countries were all too dependent on price fluctuations on the international commodity markets.

While commodity prices are always more variable than those for manufactured goods and services, commodity markets over the last five years have seen extraordinary, almost unprecedented, volatility.

3. Expresses the urgent need for supportive international policies to improve the functioning of commodity markets through efficient and transparent price formation mechanisms, including commodity exchanges, and through the use of commodity price risk management instruments

Commodity markets have continued to be depressed, and to be destabilized by changing demand and supply conditions.

Recognizing also that structural changes in international commodity markets, particularly the increasing concentration in trade and distribution, constitute new challenges for commodity producers and exporters in developing countries,

quot Recognizing also the need for a better functioning of commodity markets and for stable and more predictable commodity prices through, among other things, avoiding excessive price fluctuations and searching for long term solutions to commodity problems,

In the short term, dollar depreciation does not affect supply and demand, but it does affect speculation and investment in oil futures markets.