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Related to commodities: commodities market


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 ?
The Bloomberg index tracks 20 different commodities, which are subsequently weighted by liquidity and economic significance.
As this paper explains, the apparent relationship between commodity prices and assets in commodity mutual funds is mostly mechanical (Figure 3), arising because the value of a fund's holdings must rise when the prices of commodities rise, even without any new investment on the part of mutual fund shareholders
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The company targets its services to financial professionals as well as farmers, manufacturers, end-users and bankers involved in production, procurement and financing of physical commodities.