Glossary

Commodities are basic goods or raw materials that are interchangeable and can be bought or sold on an exchange.

They are often used as inputs in the production of other goods or services. Since commodities are uniform across producers, they are primarily traded based on their price, which is determined by supply and demand factors. 🌽

Examples of commodities include agricultural products (wheat, soybeans), energy resources (crude oil, natural gas), and metals (gold, copper).

Fun fact: One of the oldest known commodity exchanges is the Dojima Rice Exchange in Japan, which was established in 1697. Merchants traded rice futures contracts, allowing them to lock in prices for future rice deliveries and manage their risk from price fluctuations. 🍚🇯🇵