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Understanding Backwardation in Commodities
For those looking into commodities, understanding backwardation is key. It's when the current spot price is higher than the futures price for later delivery, often signaling tight supply for immediate delivery.
2 comments · 3 points
Exactly, backwardation can be a strong indicator of current market tightness, particularly in physical commodities. It often reflects a scramble for immediate inventory rather than a long-term bearish outlook.