Hi all, can some one share on real utility / application of forward curve. i understand that given spot prices we can derive forward prices at different maturities using different models. but when traded forward prices are available in the market like in energy, softs like coffee, sugar (forward FOB), do one still need to use forward curve model to arrive at rates. can some one who actually are using forward curve models share thier experiences.? any website / blog / papers to understand forward curve utility? and how different it is from forecasting.thanks a lot for the attention and reply

hi, thank you for the reply. but my question is not on the modelling aspects, but on utility front.like in commodities like coffee, sugar, soybean oil, and even in energy commodities like natural gas and metals, the forward quotes are available upto 10 months and even more than that in the market. when these quotes are there, then where do we find the utility of forward curve?any one who is actually using forward curve model in any systems like sungard, for making any decisions. users request to share your experiences.

The obvious answer is asset investment decisions - but that's really about taking an out of consensus view on "fundamental " drivers. All other uses leave you with Mark To Model risk of one kind or another, which presumably is at the root of your question.