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Some Important Commodities and their Properties

 

Commodity

Demand

Production

Property

Futures Price

Corn

Constant throughout
the year

Seasonal Production

Interest and Storage Cost determines the price

Increases until harvest time and then drops sharply

Natural Gas

Seasonal Demand

Produced throughout
the year

Too expensive to store / Demand peaks in winter

Futures price rise steadily
in fall months

Oil

Constant world-wide demand

Produced throughout
the year

Can be cheaply
transported

Oil prices are stable in absence of short-run
supply and demand

Electricity

Price is determined by the demand and supply at a given point in time

Non-storable

Futures prices of electricity is more volatile than financial futures

 
 

 






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