Hii friends

Today let me speak something about the basics:

Let me explain you today about the Contango market and Backwardation market.

Today's date is: 26.03.2013

I want to observe the trading of futures at Chicago Board of Trade (CME group)

Get the wheat futures prices at the following address

http://www.cmegroup.com/trading/agricultural/grain-and-oilseed/wheat_quotes_globex.html

Wheat Futures (CME group: 26.03.2013)
Time	Futures prices of wheat (Cents per bushel)
May, 2013	728
July, 2013	730
Sept, 2013	736.6
Dec, 2013	748.4
March, 2014	760.2

Plotting the futures prices, we get the following curve. This is an example of futures market in backwardation. We can see as on today, the futures prices have a upward sloping curve. This is an example for backwardation.

The opposite is true for contango market in commodities futures market.



I hope you would enjoy it.

Surya