Commodity

In financial markets, a commodity is differentiated from other assets and securities by either being natural resources, goods refined or produced from natural resources or the products of agriculture.

Broadly speaking, there are two different types of these trading assets, hand and soft. Hard commodities are typically extracted from the earth. They include metals like gold, silver and copper, as well as fuels like crude oil and natural gas.

The soft raw materials are grown from the earth or nurtured from it. They are the products of farming and agriculture like wheat, coffee, sugar and even livestock. There exist global markets where standardized units of all of the above and more are traded