A commodity is something for which there is demand, but which is supplied without qualitative differentiation across a given market. Characteristic of commodities is that their prices are determined as a function of their 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, soybeans, aluminium, rice, wheat, gold and silver. However, the process of commoditization is ongoing as markets evolve. In essence, commoditization occurs as a good or service becomes undifferentiated across its supply base by the diffusion of the intellectual capital necessary to acquire or produce it efficiently. As such, many products which formerly carried premium margins for market participants have become commodities, such as generic pharmaceuticals and silicon chips. This heap of iron ore pellets will be used in steel production. ... Pumpjack pumping an oil well near Sarnia, Ontario Petroleum (from Greek petra – rock and elaion – oil or Latin oleum – oil ) or crude oil is a thick, dark brown or greenish liquid. ... Coal Coal (IPA: ) is a fossil fuel formed in swamp ecosystems where plant remains were saved by water and mud from oxidization and biodegradation. ... Ethanol, also known as ethyl alcohol, drinking alcohol or grain alcohol, is a flammable, colorless, slightly toxic chemical compound, and is best known as the alcohol found in alcoholic beverages. ... Magnification of grains of sugar, showing their monoclinic hemihedral crystalline structure. ... Binomial name Glycine max Soybeans (US) or soya beans (UK) (Glycine max) are a high-protein legume (Family Fabaceae) grown as food for both humans and livestock. ... General Name, Symbol, Number aluminium, Al, 13 Chemical series poor metals Group, Period, Block 13, 3, p Appearance silvery Standard atomic weight 26. ... This article needs additional references or sources for verification. ... Species T. aestivum T. boeoticum T. compactum T. dicoccoides T. dicoccon T. durum T. monococcum T. spelta T. sphaerococcum T. timopheevii References:   ITIS 42236 2002-09-22 For the indie rock group see: Wheat (band). ... General Name, Symbol, Number gold, Au, 79 Chemical series transition metals Group, Period, Block 11, 6, d Appearance metallic yellow Standard atomic weight 196. ... General Name, Symbol, Number silver, Ag, 47 Chemical series transition metals Group, Period, Block 11, 5, d Appearance lustrous white metal Standard atomic weight 107. ... Commoditization is a term from both economics and the social sciences which is used to describe the process by which a good becomes saleable in the market. ...

Linguistically, the word commodity came into use in English in the 15th century, derived from the French word "commodité", meaning today's (2000) "convenience" in terms of quality of services. 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" like energy, goods, or industrial raw materials. The Vietnamese equivalent is "hàng hoá", meaning wares, goods. A convenience is a luxury that is intended to save a consumer time or frustration. ...

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. It is the contract and this underlying standard that define the commodity, not any quality inherent in the product. The introduction to this article provides insufficient context for those unfamiliar with the subject matter. ... A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. ...

Commodities exchanges include: A commodities exchange is an exchange where various commodities and derivatives products are traded. ...

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

Markets for trading commodities can be very efficient, particularly if the division into pools matches demand segments. These markets will quickly respond to changes in supply and demand to find an equilibrium price and quantity. In addition, investors can gain passive exposure to the commodity markets through a commodity price index. The Chicago Board of Trade (CBOT) NYSE: BOT, established in 1848, is the worlds oldest futures and options exchange. ... Euronext. ... The London Metal Exchange or LME is the futures exchange with the worlds largest market in options and futures contracts on base and other metals. ... The New York Mercantile Exchange**** NOTE the AMENX is FAKE, created by york-commodities to scam your money, if you send money you will never see it again**** You have been warned. ... If you are looking for MCX connector, see here -- Multi Commodity Exchange (MCX) is an independent commodity exchange based in India. ... Chicago Board of Trade Futures market Commodity markets are markets where raw or primary products are exchanged. ... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ... Market segmentation is the process of grouping a market into smaller subgroups. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... Price of market balance In economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the abscence of external shocks the (equilibrium) values of economic variables will not change. ... In economics and business, the price is the assigned numerical monetary value of a good, service or asset. ... A Commodity Price Index is a fixed-weight index of the spot or transaction prices of multiple commodities. ...

See also

Look up Commodity in
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• 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