Lard, for instance, is in both the Livestock and Products Index and in the Fats and Oils Index. Furthermore, the groupings are not mutually exclusive. For example, sugar is not included in any special group. However, some of the 22 commodities do not fall into one of these four groupings. The items upon which the index is based are classified further into four smaller groups: Metals, Textiles and Fibers, Livestock and Products, and Fats and Oils. ![]() Foodstuffs include butter, cocoa beans, corn, cottonseed oil, hogs, lard, steers, sugar, and wheat. Raw Industrials include burlap, copper scrap, cotton, hides, lead scrap, print cloth, rosin, rubber, steel scrap, tallow, tin, wool tops, and zinc. The 22 commodities are combined into an "All Commodities" grouping, with two major subdivisions: Raw Industrials and Foodstuffs. The price for print cloth is an average of the spot price and price for the most distant forward contract because it was determined that a large part of the sales of print cloth are made on a contract basis. Trade publications may use this type of price for commodities such as cocoa beans, coffee, and wool tops. Often they are exchange prices - a price for a completely standard commodity which eliminates the effect of minor quality changes on actual transaction price. Some of the prices used are nominal prices in that they are not actual transaction prices. In the absence of a spot price, a bid or asked price may be used. Highly fabricated commodities are not included for two reasons: (1) they embody relatively large fixed costs which causes them to react less quickly to changes in market conditions and (2) they are less important as price determinants than the more basic commodities which are used throughout the producing economy.Ī spot price is a price at which a commodity is selling for immediate delivery. ![]() ![]() The commodities used are in most cases either raw materials or products close to the initial production stage which, as a result of daily trading in fairly large volume of standardization qualities, are particularly sensitive to factors affecting current and future economic forces and conditions.
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