Definition: A commercial is entity involved in the production, processing, or merchandising of a commodity.
Commercials are considered the "smart money" in the commodity markets. They work with the commodities every day and should know where the prices is headed better than anyone.
Commercials use the commodity in their business. They often use the futures markets to buy or sell commodities. They primarily hedge against the price of the commodity making an adverse move, which might increase their cost of doing business.
Also Known As: commercials, insiders
Examples:
Commercial buying from grain processors is causing the price of corn futures to move higher.
