Commodity Option Pricing: A Practitioner's Guide

Conversion Factors

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tonne (T) = 1 metric ton (MT) = 1000 kg.

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(oil) barrel (bbl) = 42 US gallons (158.9873 litres, 34.9723 Imperial gallons).

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US gallon (gal) = 3.78541 litres.

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pound (lb) = 453.592 grams – N.B. the avoirdupois pound is used in the US grain markets.

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troy ounce (oz) = 31.1034768 grams (used for precious metals) – N.B. the avoirdupois ounce is never used in commodity markets.

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US bushel (Bu) = 60 pounds (27.2155 kg) of wheat/soybeans, or 56 pounds (25.4012 kg) of corn.

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short ton (ton) = 2000 lb ∼ 907.2 kg (used for soybean meal contracts).

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long ton (ton) = 2240 lb ∼ 1016.05 kg (used for sugar contracts).

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US hundredweight (cwt) = 100 lb ∼ 45.35923 kg (used for rough rice CBOT contracts).

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British thermal unit (Btu) = 1055.056 joules.

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board-foot (FBM) = 1 foot square in area by one inch thick (used for lumber contracts). Also 1 MBF = 1 thousand board-feet.

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cf of natural gas = 1023 Btu (approx.) in energy content.

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tonne of gas oil = 7.44 barrels.

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dollar per barrel = 2.381 cents per gallon.

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Wh (watt-hour) = 3600 joules.