Commodities are raw materials of a wide variety of areas:

Grains – Corn, Soybeans, Wheat

Livestock – Cattle, Hogs

Precious Metals – Gold, Platinum, Silver

Industrials – Cotton, Copper

Softs – Cocoa, Coffee, Sugar, Orange Juice

Energy – Crude Oil, Heating Oil, Natural Gas

The commodities market consists of the trading of forward contracts or futures contracts; forward contracts are contractual agreements to buy/sell any commodity between two entities; futures contracts are market agreements to buy/sell very specific commodities between two entities over a recognized commodities exchange.

The most popular way to monitor futures contracts for the generic commodities market is through an index known as the Commodities Research Bureau (“CRB”) Index - the most widely followed basket of commodities in the world. The Index consists of 17 equally-weighted commodities divided into these sectors – grains, livestock, precious metals, industrials, softs, and energy.

The index was created back in 1957 and since then, there have been nine revisions to the Index components, the first on April 3, 1961 and the latest on December 6, 1995.

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