A futures contract is a standardized legal agreement to buy or sell a specific asset at a predetermined price at a specified time in the future. These contracts are commonly used in commodities trading, allowing investors to hedge against price fluctuations or speculate on future price movements. Futures contracts can be traded on exchanges, providing liquidity and transparency. They cover a wide range of assets, including agricultural products, energy, and financial instruments. By locking in prices, participants can manage risk and potentially profit from market changes.