A commodity is anything for which there is demand, but which is supplied without qualitative differentiation across a market. In other words, copper is copper. Rice is rice. Stereos, on the other hand, come in many varieties of quality. And, the better a stereo is, the more it will cost. Whereas, the price of copper is universal, and fluctuates daily based on global supply and demand.

One of the characteristics of a commodity good is that its price is determined as a function of its market as a whole. Well-established physical commodities have actively traded spot and derivative markets. Generally, these are basic resources and agricultural products such as iron ore, crude oil, coal, ethanol, sugar, coffee beans, soybeans, aluminum, rice, wheat, gold and silver. Agriculture refers to the production of goods through the growing of plants and fungi and the raising of domesticated Animals The study of agriculture Iron ores are rocks and Minerals from which Metallic Iron can be economically extracted Petroleum ( L petroleum, from Greek πετρέλαιον, lit Sugar is a class of edible Crystalline substances mainly Sucrose, Lactose, and Fructose. A coffee bean is the seed of the coffee plant (the pit inside the red or purple fruit WikipediaNaming Rice is a Cereal foodstuff which forms an important part of the diet of many people worldwide and as such it is a staple food for many Wheat ( Triticum spp is a worldwide cultivated grass from the Levant area of the Middle East. Gold (ˈɡoʊld is a Chemical element with the symbol Au (from its Latin name aurum) and Atomic number 79 Silver (ˈsɪlvɚ is a Chemical element with the symbol " Ag " (argentum from the Ancient Greek: ἀργήντος - argēntos gen

Commoditization occurs as a goods or services market loses differentiation across its supply base, often by the diffusion of the intellectual capital necessary to acquire or produce it efficiently. Commodification (or commoditization) is the transformation of goods and services (or things that may not normally be regarded as goods or services into a Commodity Intellectual Capital was a pioneer Webzine opinion and discussion forum begun in 1996 by Pete duPont As such, goods that formerly carried premium margins for market participants have become commodities, such as generic pharmaceuticals and silicon chips. Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information Generic brands of consumer products (often supermarket goods are distinguished by the absence of a Brand name. Microchipsjpg|right|thumb|200px|Microchips ( EPROM memory with a transparent window showing the integrated circuit inside

Linguistically, the word commodity came into use in English in the 15th century, derived from the French word "commodité", similar in meaning to "convenience" in terms of quality of services. Convenience is anything that is intended to save Time, Energy or Frustration. The Latin root meaning is commoditas, referring variously to the appropriate measure of something; a fitting state, time or condition; a good quality; efficaciousness or propriety; and advantage, or benefit. The German equivalent is die Ware, i. e. wares or goods offered for sale. The French equivalent is "produit de base" or "matière première" like energy, goods, or industrial raw materials.

A commodity's value changes over time.

Commodity trade

Main article: Futures exchange

In the original and simplified sense, commodities were things of value, of uniform quality, that were produced in large quantities by many different producers; the items from each different producer are considered equivalent. A futures exchange is a central financial exchange where people can trade standardized Futures contracts; that is a contract to buy specific quantities of a Commodity It is the contract and this underlying standard that define the commodity, not any quality inherent in the product. A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law In Marketing, a product is anything that can be offered to a Market that might satisfy a want or need

Commodities exchanges include:

• Chicago Board of Trade
• Euronext.liffe
• London Metal Exchange
• New York Mercantile Exchange
• Multi Commodity Exchange
• Dalian Commodity Exchange

Markets for trading commodities can be very efficient, particularly if the division into pools matches demand segments. A commodities exchange is an Exchange where various Commodities and derivatives products are traded The Chicago Board of Trade ( CBOT) established in 1848 is the world's oldest futures and options exchange. Euronext NV is a pan- European Stock exchange based in Paris and with subsidiaries in Belgium, France, Netherlands The London Metal Exchange or LME is the Futures exchange with the world's largest market in options and Futures contracts on base and The New York Mercantile Exchange (NYMEX is the World 's largest physical Commodity Futures exchange, located in New York City. Multi Commodity Exchange ( MCX) is an independent Commodity exchange based in India. The Dalian Commodity Exchange ( DCE)(is a Chinese futures exchange based in Dalian. Commodity markets are markets where raw or primary products are exchanged Economic efficiency is used to refer to a number of related concepts A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs These markets will quickly respond to changes in supply and demand to find an equilibrium price and quantity. Supply and demand is an Economic model describing effects on price and quantity in a Market. In Economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium values of economic Price in Economics and Business is the result of an exchange and from that trade we assign a numerical Monetary value to a good, In addition, investors can gain passive exposure to the commodity markets through a commodity price index. A commodity price index is a fixed Mandan weight index or (weighted average of selected Commodity prices which may be spot or futures prices

See also

• List of traded commodities
• Commodity fetishism
• Commodity markets
• Commodity money
• Commodity price index
• Trade
• Jim Rogers (commodities expert)
• Trading Places - comedic film about playing the commodity markets