Commodity Market Data

What Is Commodity Market Data?

A commodity market is one where people trade in agriculture, livestock, metals, and extracted materials like rubber. Agriculture and livestock are soft commodities whereas extracted and mined goods are hard commodities.

Where Does Commodity Market Data Come From?

Most commodity market data comes from markets (local and international) that trade specifically in these commodities. The largest market exchanges include the CME Group, the Tokyo Commodity Exchange, Euronext, and the Intercontinental Exchange.

Other sources include industry reports, projected yields, and economic data—people buy more gold when they expect a recession, for example.

What Types of Columns/Attributes Should I Expect When Working with This Data?

As written above, since commodity market data tracks stocks, funds, and futures, a lot of data comes from stock markets. These sources update frequently but have standardized formats that are easy to work with.

Other attributes include industry data, including historical yield reports and industry news, such as improved mining robotics or new regulations on fertilizer use in companies where you make trades.

What Is Commodity Market Data Used For?

Companies of all sizes use this data to make investment, trading, and lending decisions. Individuals, too, may use this data to invest in stock or diversify their financial portfolios.

Economists and the governments and NGOs that use economic data also track commodities markets—especially for those countries whose main employers are in commodities industries or that supply a large portion of the world’s commodities.

How Should I Test the Quality of Commodity Market Data?

When collecting this data, ensure that it is complete and relevant to your needs. Then, make sure to standardize and cleanse the data thoroughly.

Most important, make sure that any dataset you create is fed accurate information with no delays in updates. After all, as with any stock market-related data, algorithmic trading models are used to optimize investment and trading decisions. And if your miss even one mistake or update delay, the algo-trading model will continue to roll and compound the effect of that mistake.

Interesting Case Studies and Blogs to Look Into

The World Bank: Commodity Markets
International Monetary Fund: IMF Primary Commodity Prices

Tangible Examples of Impact

The CSRC (China Securities Regulatory Commission) has announced that trading of onshore palm oil futures contracts on the DCE (Dalian Commodity Exchange) will be open to foreign investors starting 22 December.

Since listing the contract in 2007, the DCE has developed into the world’s largest trading platform for palm oil futures.

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With the CSRC’s approval, palm oil will become China’s seventh commodity futures product available to foreign investors, as the country seeks to increase its pricing power in the global commodity markets.

The six commodities contracts in China that are currently open to foreign investors are crude oil, iron ore, TSR 20 rubber, low-sulphur fuel oil, purified terephthalic acid (PTA), and a new bonded copper contract.

Regulation Asia: China Set to Allow Foreign Access to DCE Palm Oil Futures