Cash market

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What is the cash market and why is it important? 

The cash market (also called the spot market) is where assets are traded for instantaneous delivery and settlement on value date (for example D+2 in foreign exchange markets). It contrasts with the derivatives market, where the trade date differ from the settlement.

One of the constraints of the cash market is the following: the investor who delivers the traded assets must hold the assets necessary for the orders settlement so that the transaction can take place on the value date. This can be challenging in commodity markets, where delivery is physical and tied to a specific geographic location. 

Which market drives the other: cash or derivatives?

Which is the leading market? Is it the cash market (i.e. the need for immediate assets) that influences the derivatives markets or rather the derivatives (i.e. the expectations of the movement of securities until a certain maturity date) that move the cash prices?  The answer is not necessarily straightforward and requires further analysis. Depending on the underlying asset, the cash flow influences or is influenced by the derivative flow.   

The commodities case

Commodities are a special case due to their nature as consumer assets. For example, in April 2020, near-immediate oil delivery contracts saw negative prices for the first time in history, yet futures prices did not necessarily follow. 
This reflects the reality of the moment: poor harvest, adverse weather conditions, drop in cyclical demand, almost saturated storage capacities, do not necessarily imply that these conditions will persist. 
On the other hand, in markets where futures prices are derived from cash prices through a cash-and-carry model, cash flows often drive derivatives price movements.