What is the role of futures in commodity trading?

In commodity trading, futures contracts are used as a means of buying or selling a certain amount of a commodity at a predetermined price and date in the future. Futures can be used for both hedging and speculation purposes. For example, farmers can use futures contracts to lock in a price for their crops before they are even harvested, thereby reducing the risk of price fluctuations. On the other hand, traders can use futures to speculate on the direction of commodity prices and make a profit from price movements. The role of futures in commodity trading is to provide a standardized and regulated marketplace where buyers and sellers can transact with each other with a high degree of transparency and liquidity.