The futures price for delivery in January, at the peak of consumption, is only 94.9 cents, leaving no spread over today's price to pay storage costs.
The difference between the normally lower futures price and the spot price is an insurance premium the farmer is willing to pay to guarantee himself the September price, when he can deliver his crop.
Or the odd shape of the oil-futures price curve, which suggests the market thinks the price could spike later this year, then fall and return to today's prices by 2012.
The industrial commodity slid over the last couple of months on macroeconomic worries, said Phil Flynn, senior market analyst with The Price Futures Group.
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But one of Chicago's proudest feats was the creation of financial futures markets, which prompted far-flung firms and farmers to adjust their behaviour to the slightest twitch in the price of pork futures or Canadian dollars.
That is about nine times the US benchmark -- the Henry Hub futures price -- for LNG.
In fact, he said, the higher price volatility in the metals futures lately may heighten interest in options.
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However, so long as both the long and short positions are equally leveraged, the price of the futures contract will not change very much because there are just as many forced buyers as forced sellers.
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The constant onslaught of cash into these markets causes a frenzy in the price of the futures contracts and drags the spot prices ever upward.
The sell-off was probably triggered by a 3% drop in the price of Brent futures in international exchanges.
Hedge funds do gain access to the spot price via futures or physical, too.
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And judging by the price of futures contracts based on the Case-Shiller composite index, investors expect house prices to fall further.
Investor cans bypass both company risk and commodities futures trading costs by purchasing U.S. Oil, an exchange-traded fund that tracks the price of oil futures.
Perhaps the clearest indicator of what the markets think is the price of federal-funds futures contracts.
The main job of the futures market is to find out what the price is.
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The chart reveals that since 2004, the monthly OBV has confirmed each new monthly price high for the gold futures.
We have the futures markets: the future price of corn and soy and wheat has gone up.
If a farmer wants to protect from falling corn and soybean prices, it can lock in the price in the futures market, also a hedging strategy.
Sandy caused the price of gasoline futures to climb 10 cents to 15 cents a gallon, and a similar increase could unfold at the pump, Mr. Daco said, adding that any price spike would last just days.
The only clear examples where prices were not lower six months after the initial price spike all predate an active crude oil futures market: the Arab oil embargo, Iranian Revolution, and Iran-Iraq wars.
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At that time the implied three-month yield stood at 2.05% and represents a retrospective step to January when the futures contract last traded at that price.
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Judging by the price of Fed fund futures, investors expect the federal funds rate to be as low as 2.25% by the end of the year.
To limit the risk, Dalio wrote that jewellers should purchase gold-futures contracts designed to rise in value when the price of gold falls.
The grain futures markets are also starting to turn around their recent bearish price trends as the new year unfolds.
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The 10-year futures contract expiring September rose to its highest price yet to trade at 126-13 lowering the yield to 2.75%.
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The futures and forward market is trying to price in the Fed tapering back asset purchases by late September.
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Any big price moves in the grain futures markets Friday may spill over into other commodity markets, including gold and silver.
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These exchanged funds (ETFs) purchase a variety of agricultural commodity futures, and increases in the price of wheat, corn, cattle, and other food prices will benefit shareholders of these securities.
The other dinosaur den is financial options--the equivalent of the right, for example, to buy Treasury bond futures at a certain strike price--where traders hang over the railings, screaming and waving frantically.
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