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On July 27, Japanese Prime Minister Shigeru Ishiba said in an interview with NHK that he plans to stay in office despite growing calls within the ruling party for him to resign after last weeks election defeat. "I will devote myself to the future of the people and the country," he said. He added that he must take responsibility for implementing the recently announced US-Japan trade agreement. Ishiba will speak at a Liberal Democratic Party meeting on Monday. LDP members have been calling for someone to be held accountable for the results of the July 20 Senate election. Former Foreign Minister Toshimitsu Motegi called on the LDP to change its leader on his YouTube channel over the weekend. Several Japanese media reported last week that Ishiba planned to resign, but the latter later denied the news. When NHK asked him if he had wavered in his decision to continue to govern, Ishiba replied "no".Russian Defense Ministry: Russian troops have attacked Ukrainian remote drone control stations. The deployment locations of the Ukrainian Armed Forces in 146 regions have been attacked.On July 27, US President Trump posted a picture on his "real social media" showing former US President Obama driving the white Ford Mustang SUV that former US football star OJ Simpson rode when he fled in the "wife murder case" in 1994, while Trump and Vice President Vance were driving behind to catch up. Vances image was also modified and came from the previously popular "Fat Vance" emoticon package.On July 27, Russian Presidential Press Secretary Dmitry Peskov told reporters that Russian-Ukrainian relations after the special military operation are currently an overly theoretical issue, and the tasks of the special military operation must be completed first. Peskov said that before determining the principles of future interaction between Moscow and Kiev, it is necessary to confirm that the tasks facing the special military operation in the direction of Ukraine have been completed. He said: "First of all, we still have to solve the problem. We need to confirm that the tasks facing the special military operation have been completed." Peskov added that Russia prefers to achieve peace with Ukraine through political and diplomatic means. However, Kiev and its Western allies have rejected all proposals for peace talks, so the special military operation continues.According to Russian media: Kremlin spokesman Peskov said that Russia prefers to resolve the Ukrainian conflict through political and diplomatic means, but Kiev and the West rejected this approach.

Commodity Investing: How to Get Started

Larissa Barlow

Mar 25, 2022 17:36

What Is the Definition of a Commodity? 

Commodity is a term that refers to a basic good used in trade that is interchangeable with other similar items. Commodities are frequently utilized as raw materials in the manufacture of other items or services. While the quality of a particular commodity may vary somewhat amongst producers, it is generally uniform. Commodities must also fulfill set minimum requirements, referred to as a base grade, before they may be traded on an exchange.


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Commodities: An Introduction

The basic premise is that there is minimal distinction between a commodity produced by one producer and a commodity produced by another. Regardless of the manufacturer, a barrel of oil is essentially the same commodity. In comparison, when it comes to electronics, the quality and functionality of a particular product might vary significantly depending on the manufacturer.

 

Commodities include wheat, gold, meat, oil, and natural gas. The term has been broadened in recent years to cover financial instruments such as foreign currencies and indices. Technological advancements have also resulted in the introduction of new commodities into the marketplace. For instance, minutes and bandwidth on a cell phone.

Commodity Buyers: There are Several Types

There are two distinct categories of commodity buyers: those that engage in transactions with producers and those who behave as speculators.

Buyers and Manufacturers

Commodities are often sold and purchased via futures contracts on exchanges that regulate the quantity and minimum quality of the commodity being traded. For instance, the Chicago Board of Trade (CBOT) specifies that each wheat contract is for 5,000 bushels and specifies the grades of wheat that may be utilized to fulfill the contract.

 

Commodity futures traders fall into two categories. The first category includes commodity buyers and producers who utilize commodity futures contracts for the hedging reasons for which they were designed. When the futures contract expires, these traders produce or receive delivery of the underlying commodity.

 

For instance, a wheat farmer who plants a crop can protect himself from losing money if the price of wheat declines before the crop is harvested. When the crop is sown, the farmer can sell wheat futures contracts, ensuring a set price for the wheat at harvest.

Speculators in Commodities

The speculator is the second sort of commodities trader. These are traders that participate in the commodities markets solely to benefit from the market's erratic price changes. When the futures contract expires, these traders have no intention of producing or taking delivery of the underlying commodity.

 

Numerous futures markets are extremely liquid and exhibit a high degree of daily range and volatility, which makes them quite attractive for intraday traders. Many index futures are utilized to hedge risk by brokerages and portfolio managers. Additionally, because commodities do not normally trade in lockstep with the equities and bond markets, some commodities may be utilized to diversify an investment portfolio successfully. 

How Are Commodities and Derivatives Related?

The current commodities market is primarily reliant on derivative instruments such as futures and forward contracts. Without the need to exchange real commodities, buyers and sellers may deal simply and in big numbers. Many buyers and sellers of commodity derivatives do so in order to bet on the underlying commodities' price fluctuations for risk hedging and inflation protection objectives.