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A commodity is food, metal, or another fixed physical substance that investors buy or sell, usually via futures contracts.


A generic, largely unprocessed, good that can be processed and resold. Commodities traded in the financial markets for immediate or future delivery are grains, metals, and minerals. They are generally traded in very large quantities. See also futures contract.


Commodities are bulk goods and raw materials, such as grains, metals, livestock, oil, cotton, coffee, sugar, and cocoa, that are used to produce consumer products.

The term also describes financial products, such as currency or stock and bond indexes.

Commodities are bought and sold on the cash market, and they are traded on the futures exchanges in the form of futures contracts.

Commodity prices are driven by supply and demand. When a commodity is plentiful -- tomatoes in August, for example -- prices are comparatively low. When a commodity is scarce because of a bad crop or because it is out of season, the price will generally be higher.

You can buy options on many commodity futures contracts to participate in the market for less than it might cost you to buy the underlying futures contracts. You can also invest through commodity funds.


any economic GOOD but in commercial circles more specifically agricultural produce and minerals such as wheat, tea, copper, iron ore, etc. See COMMODITY MARKET, INTERNATIONAL COMMODITY AGREEMENT.


  1. 1see GOODS.
  2. raw materials rather than goods in general: for example, tea, coffee, iron ore, aluminium, etc.
References in periodicals archive ?
4) When world growth accelerates, so does production of goods such as automobiles and consumer electronics, the need for raw materials, and worldwide demand for commodities.
Commodities and related stocks have a positive correlation, but other factors also affect the market, says Vikas Jain, AVP, retail research, Religare Securities.
Commodities Online LLC is a private company in the commodities wholesaling business.
For the last fifteen years, investment bankers have touted commodities as an asset class.
In the ensuing 16 months, Hightower has been proven to be on the mark, as commodities ranging from crude oil to copper to soybeans have trended upward, driven by surging demand from Asia.
The Nova source says only 1% of all commodities futures contracts result in delivery of product.
what can we do about conflict commodities when they are part of so many products most of us now consider necessities?
So, let's take the hit, admit that most castings are commodities, and move on.
As a result of the Taxpayer Relief Act of 1997, traders in securities or commodities are permitted to elect mark-to-market treatment (which is required for dealers).
On the other hand, these incidents also illustrate the resilience of even specialized commodities markets and the ability of world markets to absorb dramatic shocks.
CHICAGO -- Commodity Research Bureau (CRB), the world's leading commodity and futures research, data and analysis firm since 1934, has launched an expanded Global Commodity Pricing Service that provides institutions with access to daily and historical commodity prices for over 1,000 commodities around the world.
This provides for an invaluable tool to anyone or business impacted by the price of commodities like food, oil, metals, currencies or interest rates," added Pikat.