WHAT IS A COMMODITY MARKET
A commodity market is a marketplace for buying, selling, and trading raw materials or primary products. Commodities are often split into two broad categories: hard and soft commodities. Hard commodities include natural resources that must be mined or extracted—such as gold, rubber, and oil, whereas soft commodities are agricultural products or livestock—such as corn, wheat, coffee, sugar, soybeans, and pork.
KEY TAKEAWAYS
A commodity market involves buying, selling, or trading a raw product, such as oil, gold, or coffee. There are hard commodities, which are generally natural resources, and soft commodities, which are livestock or agricultural goods. Spot commodities markets involve immediate delivery, while derivatives markets entail delivery in the future. Investors can gain exposure to commodities by investing in companies that have exposure to commodities or investing in commodities directly via futures contracts. The major U.S. commodity exchanges are ICE Futures U.S. and the CME Group, which holds four major exchanges: the Chicago Board of Trade, the Chicago Mercantile Exchange, the New York Mercantile Exchange, and the Commodity Exchange Inc
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