Understand how commodities work in global markets

Classification: hard and soft commodities

In the global market, primary goods are divided into two main categories. Those that require mining or extraction activities from the soil — such as gold, silver, copper, and oil — are known as hard commodities. The products originating from agriculture and livestock, such as coffee, wheat, sugar, and cattle, make up the soft commodities group.

What are commodities and how are they traded

Commodities refer to primary goods widely used in industrial and agricultural processes, traded on a large scale and not in small quantities. The trading of commodities involves negotiating these goods through different mechanisms. While some transactions occur with the physical delivery of the commodity, the most common form takes place via futures contracts — instruments in which two agents agree to exchange a certain good for a pre-established price at a future date.

Practical examples of commodities by category

Energy sector (hard commodities)
Crude oil and natural gas are the main representatives, driving economies around the world.

Metal raw materials (hard commodities)
Gold, silver, copper, and aluminum make up this segment, essential for manufacturing and technology industries.

Agribusiness products (soft commodities)
Sugar, corn, and coffee stand out as the most traded soft commodities in international markets.

Animal husbandry (soft commodities)
Cattle, milk, and beef form an important segment of commodity trade, directly linked to global food security.