The History Of Commodity Markets

More and more people are trading in the commodity market

. You could trade in such unique commodities as rare Earth commodities or in traditional commodities like oil and precious metals. Select Global facilitate trade in commodities. Select-Global, which you could reach at Select-Global.com, also offers SIPP (self-invested pension plan) opportunities, carbon credits exit strategies, Renewable Energy Certificates (RECs), and portfolio management services.

It is important that you understand the history of commodity markets if you are interested in trading in rare earth commodities and other commodities through Select Global. A commodity market is a market where primary/raw products are exchanged. The commodities could be food products, crude oil, electricity, precious metals, and rare earth commodities, among others.

The commodity markets as we know them today started with trade in agricultural products. Cattle, pigs, corn, and wheat were widely traded through standard instruments in the U.S. in the 19th century while other foodstuffs like soybeans were only recently added to the commodities markets. There are commodity markets in all corners of the world. For a market to be established, the industry players must reach a broad consensus on the items that will be traded.

It is difficult to overestimate the impact the development of these markets have had on different economies. Commodities markets throughout the 19th century became the innovators of, and led to improvements in warehousing, financing, and transportation. They were also responsible for the expansion of international trade.

Going back several thousand years, commodity market trade can be traced back to early civilizations. Ancient Sumerians exchanged goats and sheep while other peoples exchanged rare seashells, pigs, and other items. Ancient civilizations sought, and found ways to make trade in these commodities predictable and smooth. In ancient Sumer, small baked clay tokens that took the shape of goats or sheep were used as commodity money. Clay vessels were used to hold these tokens. The tokens were numbered and they represented promises to deliver the numbers. The tokens also contained promises on date and day of delivery (like present-day futures contracts). The vessels were sealed and there was no way of verifying the number of tokens in each vessel (without breaking the vessel or shaking it). This is the oldest known method of commodity accounting.

In classical civilizations, commodity markets were mostly based on the trade in silver, gold, spices, wood, cloth, and even weapons. These markets included standards of timeliness and quality. Today, you could get help trading in rare earth commodities, oil commodities, precious metal commodities, and other commodities through Select Global over the Internet.

by: Dan Lewis

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