A commodity swap in which one party makes a series of fixed payments and receives floating payments tied to a particular commodity price or a commodity price index. It is cash-settled agreement to exchange a fixed price on a designated commodity (reference commodity) for a floating price on a specific futures contract on the reference commodity, at a preset date or date range in the future. The fixed leg of the swap is determined at contract date and remains unchanged throughout the swap term. The floating leg is the price of a designated futures contract that fluctuates with supply and demand.