Commodities Exchange

The commodities exchange is a futures market. It's a place where corn, soybeans, and other commodities (plus the associated derivatives) are traded.

Not every exchange sells the same commodities, and not every exchange enables the trading of somewhat esoteric products like freight contracts, interest rates swaps, or weather derivatives. In legal terminology, the exchange is in charge of overseeing the standardization of commodity contracts and trading.

Under the terms of these enforceable contracts, buyers agree to take delivery of the commodity when a contract expires, and sellers will deliver the product at the end of the contract month. The exchange aims to reduce counterparty risk.