Bulk Stock refers to material commodities that can enter the circulation field, but are not retail links. They have commodity attributes and are used in industrial and agricultural production and consumption for large-volume transactions. In the financial investment market, bulk commodities refer to commodities that are homogeneous, tradable, and widely used as basic industrial raw materials, such as crude oil, nonferrous metals, agricultural products, iron ore, coal, etc. It includes 3 categories, namely energy commodities, basic raw materials and agricultural and sideline products.

Characteristics

First, the price fluctuates greatly. Only when commodity prices fluctuate greatly, traders who intend to avoid price risks need to use forward prices to determine the price first. For example, some commodities implement monopoly prices or planned prices, and the prices remain basically unchanged. There is no need for commodity operators to use futures trading to avoid price risks or lock in costs. Soybean price trends

Second, supply and demand are large. The functioning of the futures market is predicated on extensive participation in transactions by both supply and demand parties of commodities. Only commodities with large spot supply and demand can fully compete on a large scale and form authoritative prices. Third, it is easy to classify and standardize. The futures contract stipulates the quality standards of the delivered commodities in advance. Therefore, the futures varieties must be commodities with stable quality, otherwise, it will be difficult to standardize. Fourth, it is easy to store and transport. Commodity futures are generally commodities for forward delivery, which requires these commodities to be easy to store, not easy to deteriorate, and easy to transport to ensure the smooth progress of physical delivery of futures

Category

Agricultural and sideline products contracts 20 types: including corn, soybeans, wheat, rice, oats, barley, rye, pork belly, live pigs, live cattle, calves, soybean meal, soybean oil, cocoa, coffee, cotton, wool, sugar, orange juice, vegetables Seed oil, etc., among which soybeans, corn, and wheat are known as the three major agricultural product futures. 9 types of metal products: including gold, silver, copper, aluminum, lead, zinc, nickel, palladium, and platinum. 5 types of chemical products: crude oil, heating oil, unleaded regular gasoline, propane, natural rubber, etc. Commodities that can be traded in futures in China include: Shanghai futures: copper, aluminum, zinc, natural rubber, fuel oil, gold; Dalian futures: soybeans, soybean meal, corn, soybean oil, palm oil, and plastics. Zhengzhou Futures: hard wheat, strong gluten wheat, sugar, cotton, PTA, rapeseed oil. Commodities can be designed to be traded as futures and options as financial instruments, which can better realize price discovery and avoid price risks. Since bulk commodities are mostly industrial bases and are at the most upstream, changes in futures and spot prices that reflect their supply and demand conditions will directly affect the entire economic system. For example, rising copper prices will increase production costs in the electronics, construction and power industries, while rising oil prices will lead to higher prices for chemical products and drive up the price and supply of other energy sources such as coal and alternative energy sources. Investors, especially those in investment-related industries, should pay close attention to the supply, demand and price changes of commodities.