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Tech Trends Shaping Business Research

The barrage of new technologies that are introduced to the market, each with the promise of altering (or at least affecting) the corporate world, can easily make one numb. However, our examination of a few of the more important IT trends makes a strong argument for the fact that something important is taking place. Granularity, speed, and scale—the three key elements that have characterized the digital era—are typically being accelerated by these technological advancements. However, the extent of these shifts in bandwidth, computer power, and analytical complexity is what's creating new opportunities for organizations, inventions, and business models. Greater innovation may be made possible by the exponential gains in processing power and network speeds brought about by the cloud and 5G, for instance. Advances in the metaverse of augmented and virtual reality provide opportunities for immersive learning and virtual R&D using digital twins, for example. Technological development
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The Presence of Commodity Exchanges in Canada

Futures contracts rarely include the transfer of ownership of the commodity. Instead, futures contracts involve the possibility of receiving or delivering the commodity at a future date. As a result, commodities can be bought and sold in a futures market in the form of contracts, regardless of whether you grow them or own the real commodities themselves.

Organized commodities exchanges




Hundreds of futures contracts are traded on exchanges throughout the United States, Canada, and the world. The following are the North American exchanges that offer key agricultural-related futures contracts. All of these exchanges also trade options, which are an additional risk management tool offered by each exchange for a specific asset.

CME Group exchanges include the Chicago Mercantile Exchange (CME), which trades live cattle, feeder cattle, lean pigs, and many foreign currencies, including the Canadian dollar.
Chicago Board of Trade (CBOT) - maize, US and South American soybeans, soybean oil, soybean meal, soft red winter wheat, oats, rough rice, and ethanol, as well as mini-sized contracts (1000 bushels) of grains available.
Kansas City Board of Trade (KCBOT): hard red winter wheat.
Minneapolis Grain Exchange (MGEX) offers hard red spring wheat, grain price indices (cash prices), and apple juice concentrate.
The New York Board of Trade (NYBOT) trades coffee, sugar, chocolate, frozen concentrated orange juice, cotton, interest rates, and major currencies.
Intercontinental Exchange (ICE) - Canada offers future contracts for milling wheat, durum, canola, and western feed barley. ICE Futures United States offers contracts for cocoa, coffee, sugar, petroleum, natural gas, power, and freight, as well as soybeans, soybean products, wheat, and maize, competing with CME Group and MGEX agricultural futures.
Commodity clearinghouse
All commodity exchanges utilize a clearinghouse to manage the bookkeeping for trading futures and options contracts. The clearinghouse acts as a third party to keep track of deals between all buyers and sellers. After each trading day, all exchange members must submit their transactions to the clearinghouse.

The clearinghouse then ensures that all buyers and sellers' financial obligations are met. The clearinghouse insures all contracts by requiring all participants to maintain cash deposits (margin money) for their open futures holdings.

With the transition to electronic trading




exchanges now offer longer trading hours. All still have a daily close, but may reopen a few hours later via the electronic platform. Some commodity exchanges continue to operate a physical marketplace, where buyers and sellers conduct transactions via open outcry on the trading floor. However, these exchanges operate alongside computerized trading platforms.

In addition to keeping track of each trader's contract holdings, the clearinghouse will erase the trader's contractual obligation whenever the trader closes out (offsets) a trade position. Once a contract has been traded and processed by the clearinghouse, each party has a contract with the clearinghouse rather than the original party with whom the trade started. This allows either party to balance a futures market position because there is no need to locate and interact with the original trading partner.

The clearinghouse allows one party to liquidate or offset a position without requiring the other party in the original trade to participate in each contract sold or bought. In essence, the exchange facilitates the purchase and sale of future contracts (bringing buyers and sellers together) as well as the offsetting of positions against one another, regardless of the exchange participants' identities.

Futures contracts are standardized and legally enforceable papers. Contracts are standardized to facilitate trading. Futures contracts specify the commodity, quantity, quality, delivery or price reference point, delivery period, and delivery conditions.

The following are explanations of the ICE Futures Canola contract specifications.

Delivery or price reference points.
Delivery or price reference points are critical for the effective operation of each futures contract. The exchange has identified these physical locations. For example, the ICE canola contract prices physical delivery of Canada canola free-on-board (FOB) at key delivery sites in eastern Saskatchewan, with other delivery points located throughout the Canadian prairies.

This pricing reference point is known as the FOB Par area. This means that all ICE canola futures buyers and sellers are aware that they are negotiating canola prices in the Par region.


On the ICE website, you can find additional transportation-related savings or surcharges




Currency and Units
The currency of the futures contract and the units of measurement may vary between exchanges. The price of ICE canola is in Canadian dollars per tonne. When trading futures in other currencies, such as US dollars, keep an eye out for exchange rates.

Contract months.
Not all calendar months are included in a commodity's future. Each futures contract has a specific number of contract or delivery months. ICE canola is harvested throughout the months of January, March, May, July, and November.

Contract size.
ICE canola futures contracts are traded in 20-tonne increments, whereas CBOT wheat, soybean, corn, and oats contracts are traded in 5000-bushel lots.

Contract quality.
Most contracts specify a single grade of the commodity. Other specified grades may be permitted for delivery at a premium or discount above the par contract price. The 'par' quality refers to the quality before any discounts or premiums. Price differentials in the standardized futures contract are similar to those observed in the cash or spot market.

Trading hours indicate the start and end times for trading a specific futures contract. With electronic trading, certain exchanges' contracts are open nearly 24 hours a day, while others are more restricted.

Minimum price change.
Each futures contract has a set minimum price change. ICE canola traders can only bid or offer prices in increments of $0.10 per tonne.

Daily trading limits
To keep the market orderly, commodity exchanges set trading limitations. These restrictions prevent prices from rising or falling over a certain range from the previous day's closing price. These ranges differ for each contract.

The daily restriction for ICE canola is $30 per tonne ($600 per contract). Given the previous day's closing price, the trading price can only rise or fall by that amount the following trading day. The maximum daily trading range is thus $60 per tonne, or double the trading limit. Other exchanges and contracts have varying restrictions.

Commodity futures trading does not halt once a limit up or down is reached. As long as there are buyers and sellers, activity at the limit price will continue. Daily limits may be expanded for trade the day after a limit move, depending on the contract specification provided by the exchange.

Trading Days
Different exchanges have particular trading days and hours. Commodity exchanges publish that information for each commodity under the name 'contract specifications'.

Settlement or closing price (Close)
Most futures contracts' prices swing up and down throughout the trading day as buyers and sellers conduct transactions. In general, the majority of trade occurs over a very limited range of prices near the start and end of the trading period on any particular day.

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