Types of Commodities
Agricultural commodities are those such as coffee, corn – an important source of food for livestock and humans, sugar, soybeans – whose oil is used for making crackers, breads, cakes, and cookies, and wheat – one of the most important food crops in the world.
Energy commodities include crude oil used in transportation activities and production of plastics, natural gas used for electricity generation, and gasoline, which powers light-duty trucks and cars.
Metals include gold, used in making jewelry; silver, also used for jewelry and many other industrial uses as well; and copper, the most widely used form of electrical wiring.
How are Commodities Traded?
Most commodities are traded on commodities exchanges, which include the New York Mercantile Exchange (NYMEX), the Chicago Mercantile Exchange, the Chicago Board of Options Exchange (CBOE), the Kansas City Board of Trade, the Minneapolis Grain Exchange, and the Chicago Board of Trade (CBOT). Investors may opt for indirect exposure through stocks, exchange-traded funds, and mutual funds.