If you want to gain an understanding of how global events impact your shopping experiences and businesses’ health, the outside world is the place to observe. A recent instance of this is the spurt in edible oil prices in some parts of the world after the Russian invasion of Ukraine. Such impact of external events on businesses due to wild fluctuation in prices of commodities, like cereals or oil, is all-pervasive.
A commodity exchange, at its heart, is meant to safeguard interests of farmers and raw material dealers. With this, the exchange also ensures that the interests of businesses and the end-consumer are protected.
There is no direct selling or purchasing on a commodity exchange. The key is that a producer (here, a farmer) of a commodity, who is aiming for harvest in the coming months signs a legally-bound contract, referred to as the futures contract with their most favorable buyer. This contract is what is, essentially, traded on a commodity exchange.
What Are Commodities?
Commodities refer to the basic goods (raw materials) that have a direct and indirect monetary value and can be exchanged with other commodities. These are fundamental to our existence. Metals, fuels, and agricultural products are common examples. US commodities exchange deals with corn, coffee, gold, palladium, crude oil, coal, etc.
Why Do Raw Material Producers Turn to Brokers?
Multiple factors lead producers to auction their products in a way to safeguard their profits, and thus livelihood. Natural calamities, demand uncertainties, assured sales, etc, among others, force producers to pursue genuine buyers who would guarantee the best value for their raw material.
That is how the first commodities exchange, the Chicago Board of Trade of 1848, came into existence. In fact today, US is home to two of the top commodity exchange centers, namely the Chicago Mercantile Exchange Group, and the New York Mercantile Exchange.
What Goes on at a Commodities Exchange?
At these exchanges, producers and brokers come together to clinch their best business deals. A farmer, also referred to as the hedger who wants to get the safe and best buy for his near-future harvest, must find an agreeable broker or speculator, who is confident of finding an even better market to sell his purchase.
How Does the Commodity Exchange Relate With the Economy?
The relation between hedger and speculator is like that of a risk poser and a market analyzer. A farmer wants to safeguard his interests against the fluctuating market price of that particular raw material. A speculator who anticipated better prospects for this purchased commodity also accepts the risk of loss, if the market shares go haywire.
However, if the stocks of that particular commodity are up, they will be profitable for the investor or the speculator while the hedger is stuck on the predetermined prices. Still the farmer or the producer enjoys a more secure position in this process.
Global factors such as wars, the discovery of new raw material sources, etc, have a direct influence on how these two parties engage at the exchange. Harvest security and price bargaining are directly proportional to the external events.
Our Templates to the Rescue
If you, too, are about to dabble in trading at a commodity exchange, our collection of easy-to-work-with PPT layouts will make your job a lot easier. Based on these designs, you can then make informed decisions on commodities trading.
Template 1: Commodities Exchange Basics PPT
An important task for speculators before signing any futures contract is predicting how the market capital will behave. With this graphical template, you can reflect on prices in the future while studying the market trend. This Excel-linked PPT design will allow you to track up to four variables, as shown in this image where we have monitored four metals. Find the download link to this template below.
Template 2: Commodities Exchange Basics PPT
Explain the process of working of commodities exchange with this PPT diagram. The infographic illustrates the basic exchange of futures contracts. Highlight the essential elements of this contract, such as its legalities, validity, etc, and help your audience understand this crucial financial activity. Download now!
Template 3: Types of Commodities Exchange PPT Layout
Use this PPT diagram to focus on major commodities, namely energy, agricultural products, metals, livestock, etc, that your closest exchange market deals in. Whether it is the Asian, American, or European market you are aiming at, present a comprehensive list of commodities with this template.
Template 4: Commodities Exchange Outline PPT
Thinking about delivering a full-fledged presentation on how to indulge in commodities exchange? Use this PPT layout as a pilot design to showcase the ideas and facts you will discuss next. It comprises governing policies, working capital analysis, inventory management, risk management, etc. Download this slide right away!
Template 5: Invoice Icon Showing Value of Commodity
Illustrate the importance of futures contracts and invoices in commodities exchange with this PowerPoint infographic. You may even add all other essentials of an invoice like its validity and other needed legalities. Download this editable design now!
Template 6: Commodities Exchange PPT
Here is another cover slide to explain the basics of commodities exchange. Use the guiding titles as shown to give a fair idea to your audience of how this financial activity works. Talk about the types, markets, and structural working of this exchange. Go ahead and download it now!
Template 7: Commodity Exchange Structure PPT
If you want to give your audience a fair idea of how the process works, use this structure design to explain the mechanics behind commodities exchange. Highlight the hierarchy of the governing and administrative forces, such as the general assembly, board of directors, managers, etc, with this PPT slide. Chances are the structure may be customized for your region, so edit this layout to give our factual information about this system. Download now.
Template 8: International Trade Market Example Slide
Exchanges don’t always occur between commodities, hope your audience is clear on that. You can even use this slide to explain the variety of trade markets that exist, such as the money market, derivatives market, foreign exchange market, etc, to broaden the vision of trading. Use this creative infographic template to explain this idea through diagrams.
Template 9: Futures Trading Exchange Template
Once your audience is familiar with the diversity and working of commodity exchange, you can make them aware of the risks to be wary of. These include excessive speculation, market disruption, manipulation, and fraud, as explained in this pictorial representation. Download now!
Template 10: PPT to Display the Impact of Economic Sanctions on Russia
Studying commodity exchanges is incomplete without including world events into it. Here is one such event that is rigorously captured with this PPT slide. The impact of sanctions on Russia amid the Russia-Ukraine hostility did its most in impacting their exchange market. With this slide, highlight the drop in Russian stock against a corresponding rise in inflation as imports went defunct and exports accumulated. Download now
We hope you and your audience will find these templates educational. It is a complex topic, so being simple and without clutter is key. You can get your head around the meaning and purpose of a commodity exchange using these slides. Download these now.
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