My father-in-law is in the grocery store business. They are successful but they operate on razor-thin margins and rely on high volume sales. Fortunately eating is universal and shopping at the grocery store comes with the added benefit of not being guilted into tipping +20%.

Timing basis risk occurs when the physical exposure and the hedge are priced, settled, or fixed against different dates. Unless you are handling this type of risk personally, you may not even recognize it as a risk. From a high level you have bought physical and sold futures so you are hedged right?

Even when we hedge, there may still be an element of underlying risk that we simply cannot eliminate. This residual exposure is known as basis risk.

America's credit card balances recently hit a record $1.25 trillion, up from $1.18 trillion in the same quarter last year. That's the highest level since the NY Fed began measuring in 1999.

One of the biggest differences between equities and commodities is that commodity futures usually have an expiry (settlement) date.

In a contango, the price of a commodity is increasing with time between settlement dates. The nearby price is lower than the further out settlement - it is the opposite to a backwardation. Contangos usually occur when there is ample nearby supply. Buyers are not willing to pay a premium for immediate delivery, but prices further out reflect a less certain supply picture.

With so much talk about supply chain disruptions off the back of the conflict in the Middle East, it's worth going through some of the terms that are being thrown about in the financial press, starting with backwardations.

When it comes to financing commodities, one of the most common methods is also one of the most laborious - I'm talking about Letters of Credit, or LCs as they're more commonly known.

Here's something that confuses almost every new metals trader...and even some that have been trading a while.

I was 23 years old, had two years operations experience under my belt, and had just been promoted to the deals (hedge) desk. I'd seen other members of the team handling multiple pricings with different customers on the line, all while negotiating with LME brokers and feeding prices back in real time, I couldn't wait.

Right now the world is focused on vessel freight. Bottlenecks in container and bulk shipping have the ability to bring entire supply chains to a halt, as we are seeing in the Strait of Hormuz.

College professors should not make their own books mandatory purchases.

Speculative traders would likely benefit from understanding physical trading.

The reverse is equally true.

I've worked with people who always feel the need to respond to everything.

Speculative traders often focus on macro drivers: interest rates, inflation, geopolitics, and chart patterns. A physical trader's main focus can be completely different:

One of the biggest myths about physical commodity trading is that success comes from predicting price direction.

I wasn’t born in the US so I can’t be president, and it seems like a pretty dangerous job anyway. However, here’s what I would do with tariffs if I was in charge:

Your middle-office might be sitting on your next chunk of P&L.

On a call yesterday a client told me the market was “boring” because it had only moved about 1% across most of the complex.

It's the Super Bowl this weekend. As a US citizen since 2019, I am now legally obliged to join the ~100 million Americans watching it.