Questions tagged [commodities]

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70
votes
5answers
17k views

Why is the oil future price negative?

I don't understand why the price of oil futures went negative today. News say it is because sellers cannot sell it. But, why don't they just hoard it until the coronavirus crisis is off? Why don't ...
13
votes
4answers
7k views

Why does any treasury / central bank hold gold?

I know the US treasury is slowly selling its gold reserves, but what is the actual mission and purpose when it comes to the holdings? What is the reasoning behind the slow rate of liquidation? I have ...
12
votes
5answers
885 views

What is the reasoning behind the sharp fall of oil prices starting in mid 2014?

Things I have considered: Poor economic conditions around the world could have caused an unpredicted decrease in demand. The resulting surplus has begun driving prices down. This could be ...
8
votes
2answers
610 views

What benefits do OPEC countries obtain by cutting oil supply?

It is unclear to a economic novice like me why OPEC is not cutting down production and raising oil prices. I have read several journalists commenting upon this on the internet but perhaps an economist ...
7
votes
3answers
699 views

What is the impact of fracking on oil prices?

I read an article about the recent fall of gas prices in the US claiming that the fall in gas prices was due to the expansion of fracking within the US. The article said that, over the past few ...
6
votes
4answers
332 views

Why is Uber worth almost as much as Boeing?

At $68 billion, Uber has a higher valuation than GM, Ford, and Honda. According to Microaxis, Boeing is currently valued at around $87 billion. Why is Uber worth so much? I would think that ...
6
votes
0answers
57 views

Futures Market Books

Are there any recommendation for futures market or commodity trading books? I am not interested in trading myself, but would like to have a better understanding of it for my research.
5
votes
1answer
286 views

Usage of natural gas in 1970 (where was the demand elasticity?)

The following historical graph of US Marketable Natural Gas volume has me puzzled: How was the gas used in 1970 (a peak production period), given that we would seem to be using a lot more gas now? ...
5
votes
2answers
219 views

Are there any major commodity markets with a public order book?

Most major exchanges seem to have secret order books. For example, on the NYSE only the specialists know the order books. On the NASDAQ only the market maker can see the order book. On Globex, the ...
4
votes
2answers
678 views

Oil Price Chart Scale

I found the axis on the following graph of crude oil prices over 1950-2015 from MacroTrends surprising. The y-axis labels are 20, 40, 60, 80, 100, ...but they are not equidistant. Why?
4
votes
1answer
378 views

Why are CAD, AUD known as commodity currencies

Why are some currencies like CAD, AUD known as commodity currencies?
4
votes
2answers
78 views

Source of commodity production statistics?

What would be a recommended source of historical data for commodity production amounts which is current up to the previous year or better? For example, if I wanted to know the annual global ...
4
votes
1answer
76 views

OPEC's market share strategy: What is the benefit of market share in a fungible market?

Coverage of the recent fall in oil prices frequently mentions OPEC's decision to defend their market share, sacrificing price in the process. I understand how market share is important from a ...
4
votes
1answer
79 views

Why is oil price increasing in May 2016

Why is the oil price and correspondingly the down and midstream company stock prices are increasing in May 2016, when The economic data across the world in weak China's economy is sluggish. They had ...
4
votes
1answer
64 views

Dollar Value And Commodity Prices

How does stronger dollar drive down prices of commodities and/or materials like oil?
3
votes
1answer
47 views

Annual price of precious metals

I need a list (or separate lists) with average prices of precious metals (gold, silver, platinum, palladium, etc.), by year. I prefer the annual average price or at least the price at the end/...
3
votes
1answer
68 views

How does one interpret the usda wholesale market price reports?

For example: http://www.ams.usda.gov/mnreports/nx_fv010.txt The data for mangos is : MANGOES: MARKET STEADY. flats 1 layer HT Francis (Francine) 9s 11.00 10s 12.00 12s 10.00-12.00 MX Keitt 7s 5.00-...
3
votes
2answers
107 views

Effect of Strengthening US Dollar on Commodities

Many commodities are prices in US dollars. If the Dollar strengthens, then commodities (in non-US countries) will become more expensive. From the consumers' (suppliers') point of view, this should be ...
3
votes
0answers
170 views

Optimal commodity taxation - solving for the optimal tax rates?

I need to solve for optimal tax rates for two products. In my model there are N identical households that maximize their utility function subject to a budget ...
2
votes
3answers
314 views

Labor as a commodity

Can anyone enlighten me if there are economic theories where labor is considered as a commodity like cloth and wine in the Ricardo theory, so that it can be exported and imported similarly to other ...
2
votes
1answer
37 views

How did the Hunt brothers' cornering the silver market drop gold prices in 1981?

Muro's answer at Money SE discusses the attempt by brothers Nelson Bunker Hunt, William Herbert Hunt and Lamar Hunt to corner the silver mark. But Muro didn't explain the causation. I can't infer why ...
2
votes
1answer
76 views

Why did the inverse correlation of stocks and commodities stopped working in 2008?

Usually, the commodities asset class is considered being inversely correlated with other asset classes, due to its nature of an input for manufacturing (if the prices of commodities go down, the ...
2
votes
2answers
58 views

What impact would introducing 15 times more soy worldwide do to the price of soy?

Soy is a commodity and the main export of Argentina. It is said Argentina has 40 million of hectares of arable land and it produces food for 400 million persons and that potentially could make food ...
2
votes
3answers
1k views

Heating oil more expensive than gasoline?

I see that "heating oil", which I presume to mean No. 2 fuel oil, is more expensive than gasoline: My understanding was that fuel oil is much easier to refine than gasoline and more of it is produced ...
2
votes
1answer
106 views

How do oil prices rise when crude oil inventories fall?

I am new to economics, I am reading a post on CNBC which states Weekly crude oil inventories unexpectedly fell, supporting further gains in oil prices. 1) Why does crude oil inventories unexpetedly ...
2
votes
0answers
30 views

Understanding Options Quotes

Below is a picture of today's Rough Rice Options Quote. I would like to understand how to interpret the information in the table below. Firstly, with regards to the future contract we see that it ...
1
vote
2answers
120 views

What are the most common methods of determining valuation used by economists that claim Bit-Coin is on the verge of being a bubble

I have seen many economists saying that bit-coin is highly overvalued and on the verge of a massive corrections. What are the most popular models being used to determine the proper price for bit coin?...
1
vote
2answers
41 views

Labor time and the exchange value (Marx). What about the quality of the raw materials?

Karl Marx writes in his book "capital", that the exchange value of a commodity is determined by the necessary average labor required to produce the commodity. The labor is measured in time. Here's my ...
1
vote
2answers
117 views

Pro and cons to finding coal

I found some Anthracite coal. I know a coal bed of this quality is worth money? I also know that there is a "no pun intended" carbon foot print if I decide to share my findings to others. Economics ...
1
vote
2answers
505 views

Is trading in the commodity futures much more riskier than trading in stock market futures?

My understanding is that the price of a stock at the stock exchange is determined by supply demand mechanics during trading hours, and the price of futures is determined by the price of the underlying ...
1
vote
2answers
35 views

Why do prices of consumer products seem to rise independent of their supply?

For example, in my country, the price of coconuts steadily rises, despite the fact that we still have plenty of coconuts. The same with vegetables. Is this caused primarily by an increase in the cost ...
1
vote
1answer
33 views

What value do virtual traders of commodity add to the market?

Many if not most companies trading in commodities are only trading them on paper. They will not use the commodity they are buying and can not take deliver of the physically commodity. What value do ...
1
vote
1answer
47 views

Which elements to forecast/estimate Oil/Pretroleum derivatives, would you consider?

I mean, if you had to forecast the price or production volumes of polyethylene or polyurethane, for example, which elements would you include to the model, in addition to oil crude prices/volumes? ...
1
vote
1answer
78 views

What's the relation between economic growth and buying power?

If a country had economic growth last year (2015) does that mean that the average citizen had a better buying power in that year (2015) than in the previous year (2014)? For example with their ...
1
vote
0answers
17 views

What can we infer when a commodity has a high stock-to-flow ratio?

If one commodity has a higher stock-to-flow ratio than another, what does this market signal tell us about that commodity? If it makes a difference, I'm talking about when this is a long-term ...
1
vote
0answers
18 views

What are the issues with currencies backed by commodities?

I have seen it suggested that currencies that are backed by a commodity are generally considered to be a bad idea in most cases. However, I have done a bit of my own research into representative money ...
1
vote
0answers
28 views

Will there be any significant impact if oil was priced/traded in another currency other than USD?

There is an abundance of conspiracy theories online that the USD is propped up in part by the fact that oil is traded in USD, and that countries which think about allowing trades in a different ...
1
vote
0answers
15 views

In what contexts are stable markets sub-optimal?

My understanding is that market stability is a good thing, because it allows more reliable estimates of profits (revenues minus expenses) and expected return-on-investment related to new investments. ...
1
vote
0answers
18 views

Model for the psychology of trading?

In some cases I see otherwise stable stocks or commodities having wild swings in price on exchanges. Even though the underlying company or commodity is going along normally and there is no news that ...
1
vote
0answers
71 views

What is the impact of a technology to produce gold at low cost?

Let's say in a few decades we can find a new technology to produce gold at low cost which will cause the price of gold to be as low as other metals. My question is that how would this have an impact ...
1
vote
0answers
71 views

Why does Burton Malkiel recommend investing in commodity companies instead of commodities?

Source: p 185 , ETFs for Canadians for Dummies (2013; by Russell Wild and Bryan Borzykowski). In a recent interview with the Journal of Indexes, famed investment guru Burton G. Malkiel, professor ...
0
votes
1answer
136 views

Why didn't other oil pricing benchmarks such as Brent go negative?

This question is asking why the oil (in this case, WTI) price is negative. While I think I have broadly understood why WTI collapsed, I don't really understand why other oil pricing benchmarks didn'...
0
votes
2answers
37 views

Why do farmers need short hedge?

I can't appreciate the red phrase. Pls see the question in the title. Why can't farmers simply sell their wheat ahead of time to buyers who are capable of storing this wheat, rather than inducing ...
0
votes
1answer
34 views

Is it possible to commodify the State?

Karl Marx said that capitalism commodifies everything. So I'm wondering if that rule applies to the very State itself.
0
votes
1answer
19 views

How to understand the USDA Demand/Supply report ?

Need you help .. Have couple questions about the Wheat Report M Acres stands for ? Million acres ? Yield Bu/Acre , can anybody explain this calculation ? Stocks use ratio % , how the calculation ...
0
votes
2answers
2k views

If there was world war 3, which stocks should I short? [closed]

With the Trump administration, Turkish dictatorship, North Korean nuclear weapons, and general tension around the world, we might think that there is a likelihood of something like a world war ...
0
votes
1answer
29 views

If petrol/gas prices were locked down, how would normal consumers and the producers be affected?

Hey economics stack exchange! Congrats on getting to beta! I wanted to ask a question that was running through my head on a road trip earlier today. Let's say a magic fairy grants a person his wish, ...
0
votes
1answer
18 views

Measurement for the downstream use of a commodity

I am looking to find a measurement that would tell me the size of the market of the downstream use of some particular commodity. For example, salt or wheat would be used by many companies downstream. ...
0
votes
0answers
20 views

Are final goods commodities?

I've been reading about final goods and commodities and some links https://en.wikipedia.org/wiki/Final_good https://marketbusinessnews.com/financial-glossary/final-good/ mention that final goods ...
0
votes
0answers
14 views

How can you define a commodity's level of pollution intensity?

I am doing a report on whether environmental regulation has an impact on goods exports for the UK (Using difference-in-differences). I have export data from 1990 to 2018 split by SITC codes. However, ...