Commodity Paper

A loan or advance for which raw materials owned by the borrower serve as collateral. Bills of lading (if the commodities are in transit) or warehouse receipts or inventory lists (if the commodities are in storage) may be used as proof of collateral. The lender does not actually take possession of the commodities unless the borrower defaults on the loan.

Commodities are raw materials (production goods) such as oil, grain, gold, copper, coffee, cocoa, lumber, cotton, wheat, corn, sugar, and natural gas. Different tools are available for investing in commodities, such as futures, options, stocks, ETFs and ETNs. Commodity paper was at the center of the Salad Oil Scandal. Allied Crude Vegetable Oil used fraud to make inventory appear many times what it was, and then borrowed against the erroneous inventory receipts.


Investment dictionary. . 2012.

Look at other dictionaries:

  • commodity paper — A loan or advance secured by commodities ( commodity). Bloomberg Financial Dictionary …   Financial and business terms

  • commodity paper — Fin loans for which commodities are collateral …   The ultimate business dictionary

  • commodity paper — Commercial documents representing loans secured by bills of lading or warehouse receipts covering commodities …   Black's law dictionary

  • commodity paper — noun : a note or draft secured by a bill of lading or other document giving a lien upon or title to readily marketable nonperishable staples …   Useful english dictionary

  • Commodity — Com*mod i*ty, n.; pl. {Commodities}. [F. commodit[ e], fr. L. commoditas. See {Commode}.] 1. Convenience; accommodation; profit; benefit; advantage; interest; commodiousness. [Obs.] [1913 Webster] Drawn by the commodity of a footpath. B. Jonson.… …   The Collaborative International Dictionary of English

  • Commodity Research Bureau — The Commodity Research Bureau (CRB) Founded in 1934 and currently a division of Barchart.com, Inc., CRB is the oldest and most well known commodities and futures research and analysis firm. History It was 1933, the country was in the depth of the …   Wikipedia

  • Commodity — Wares redirects here. For the online distribution of copyrighted goods, see Warez …   Wikipedia

  • Commodity Futures Modernization Act of 2000 — The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that officially ensured the deregulation of financial products known as over the counter derivatives. It was signed into law on December 21, 2000 by… …   Wikipedia

  • Commodity market — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

  • Commodity fetishism — Part of a series on Marxism …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.