Unlike in commodity future markets, there is no cash settlement. The spot price normally means free on board (FOB). Future prices are determined by the spot price of a commodity. Accordingly, spot commodity price PSpot can also be calculated through the present value of a future contract PF considering the risk-free rate r, the cost of storage c, the convenience yield y, and time to maturity of the future contract t:
PSpot = PF / e(r+c-y)tAt maturity the price of a commodity future is the same as the spot commodity. During its expiring month, a future, therefore, can also be called spot commodity. Index provider like Commodity Research Bureau, Goldman Sachs, Dow Jones, Standard and Poor’s, Morgan Stanley, Lehman Brothers, Merrill Lynch, and Deutsche Boerse calculate spot indices for single commodities or groups of commodities.