Futures are contracts that give the purchaser the option to buy a specified commodity at a specified price on a specified date in the future. Commodities traded this way include copper, gold, platinum, silver, crude oil, heating oil, gasoline, natural gas, corn, ethanol, oats, soybeans, soybean meal, soybean oil, rice, wheat, cattle, hogs, pork bellies, lumber, milk, cocoa, coffee, sugar, cotton, and orange juice.
Futures allow businesses to hedge their future needs for raw materials. This helps to smoothe out price fluctuations.
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