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A commodity is food, metal, or another fixed physical substance that investors buy or sell, usually via futures contracts.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson


  1. 1see GOODS.
  2. raw materials rather than goods in general: for example, tea, coffee, iron ore, aluminium, etc.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
Mineral Commodities submits that shareholders Au Mining, Tormin Holdings Limited and Mr Walker, together with other persons alleged to be connected with these shareholders (the Alleged Connected Parties), are associated and acting in concert in relation to the affairs of Mineral Commodities.
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It is followed by the Middle East and North Africa, where 65pc of countries depend on commodities.
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Hamilton Dock, Titanic Quarter (4 sites) for hot and cold food and nonalcoholic beverages or similar commodities, gifts and souvenirs.
Prices of commodities affect not just how much it costs you to buy bacon, orange juice, plywood, and gasoline but also the profitability of companies.
"There is a lot greater interest in commodities than there was 2-3 years ago.
What does the continental Commodities Strategy propose?
The biggest countries such as the People's Republic of China or India base their development on intense consumption of commodities, especially metals.
Nuveen Commodities Asset Management LLC serves as its manager and Gresham Investment Management LLC serves as sub-adviser.