From Grain to Natural Gas: The Historical Circumstances That Led to the Need for Futures Contracts

By Hilary Till, Solich Scholar, J.P. Morgan Center for Commodities, University of Colorado Denver Business School; and Principal, Premia Research LLC

This digest article covers examples of successful contracts that responded to new large-scale commercial risks over the past 170 years. The article explains the new commercial circumstances that ushered in the intense need for hedging instruments, spanning the grain, financial, crude oil, and natural gas markets. This digest article is excerpted from a seminar that was prepared by the author for staff at the Shanghai Futures Exchange.