Commodity Markets

Overview:

Introduction:

Commodity markets serve as a global platform for the exchange of raw materials such as energy products, metals, and agricultural goods. These markets influence global economic activity by determining prices, allocating resources, and supporting production cycles. This training program offers a structured overview of the mechanics, pricing factors, trading strategies, and regulatory aspects of commodity markets, equipping participants with the knowledge to evaluate market dynamics and systemic risks.

Program Objectives:

By the end of this program, participants will be able to:

• Describe the structure and function of commodity markets across sectors.

• Identify the main factors influencing commodity price movements.

• Differentiate between various commodity trading mechanisms and strategies.

• Analyze risk sources and risk mitigation tools in commodity markets.

• Interpret regulatory frameworks and ethical concerns relevant to global commodity trading.

Target Audience:

• Commodity Traders and Analysts.

• Investment and Portfolio Managers.

• Risk Management Professionals.

• Financial Analysts and Economists.

• Professionals in the Energy, Agriculture, and Metals Sectors.

• Corporate Treasurers and Procurement Professionals.

Program Outline:

Unit 1:

Introduction to Commodity Markets:

• Definition and types of commodities, including energy, metals, agriculture.

• Overview of global commodity market structure.

• Major exchanges including NYMEX, LME, and CBOT.

• Relationships between spot, futures, and derivative markets.

• Commodity markets' function in economic and supply chain stability.

Unit 2:

Commodity Price Determinants:

• Role of supply and demand in shaping commodity prices.

• Effects of trade policy and geopolitical developments.

• Seasonal patterns and climate influence on commodity flows.

• Relevance of inflation, interest rates, and currency fluctuations.

• Technical and fundamental methods for price trend evaluation.

Unit 3:

Trading Strategies in Commodity Markets:

• Types of commodity trading instruments and their characteristics.

• Market approaches such as speculation, hedging, and arbitrage.

• Overview of strategies across major commodity categories.

• Role of using indices and ETFs for commodity exposure.

• Overview of automated trading strategies and their market impact.

Unit 4:

Risk Management in Commodity Markets:

• Risk categories in commodity transactions.

• Common hedging structures used to manage price exposure.

• Key activities used for managing credit, liquidity, and operational risks.

• The importance of internal controls and regulatory compliance in risk operations.

• Consideration of ESG risks in commodity trading decisions.

Unit 5:

Commodity Market Regulations and Ethics:

• Key international regulatory frameworks.

• Responsibilities of agencies like the CFTC and FCA.

• Market integrity mechanisms and transparency requirements.

• Ethical dimensions in trading conduct and conflict of interest.