Commodities are fundamental goods used in commerce that are interchangeable with other goods of the same type. They serve as the building blocks of the global economy, functioning as raw materials for various industries and contributing to the production of finished goods.

Commodities can be categorized into two main types:

• Hard Commodities: These are natural resources that are mined or extracted from the earth. Common examples include crude oil, gold, silver, copper, and natural gas. 
• Soft Commodities: These encompass agricultural products and livestock. Examples include wheat, corn, soybeans, coffee, sugar, cotton, and cattle.

The prices of commodities can fluctuate significantly due to a variety of factors. Supply and demand dynamics are the primary drivers, but geopolitical events, economic indicators, and market sentiment also play vital roles. For instance, disruptions in oil supply due to geopolitical tensions can lead to sharp increases in crude oil prices, while favorable weather conditions may boost crop yields, impacting the prices of soft commodities.