From gold to wheat to oil, commodity trading refers to the buying and selling of primary raw materials and goods via exchanges, over-the-counter deals, or physical spot markets for more immediate trades. Commodities are the building blocks of commerce: They're used to create just about every good that is bought or sold around the world. So it follows that the global commodity market is enormous, with tens of trillions of dollars changing hands in commodity trades each year.
Long predating stock markets and even fiat currency, commodity trading is among humanity's oldest economic activities. It can be traced back to Ancient Mesopotamia (around 4000 to 4500 years ago), when people documented agreements for future deliveries of agricultural materials on clay tablets.
Commodity markets are typically sorted into four categories: energy (such as crude oil and natural gas), metals (such as gold and silver), livestock (like live cattle), and agriculture (like wheat and corn). Commodities often trade on specialized commodity exchanges, such as those within the Chicago Mercantile Exchange (CME) Group or the Intercontinental Exchange (ICE).
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Selling futures contracts protects both parties from future fluctuations in pricing. It allows sellers of commodities to lock in some of their output, even if prices fall. Traders can eliminate some of the volatility inherent in commodities trading via these contracts.
When it comes to commodity trading, these legally binding agreements tend to operate on a monthly basis. Futures contracts are typically traded on futures exchanges, like those operated by CME Group and the Intercontinental Exchange (ICE).
Commodities traders look at all of these things as assets, placing short-, medium-, and long-term wagers on how much each is really worth. Commodities are valuable in part due to how essential they are in creating most of the world's marketable goods.
Due in part to factors such as the COVID-19 pandemic and global supply chain issues, commodities experienced significant volatility from 2019 to 2025. For instance, coffee bean prices saw major swings in recent years due to climate challenges in countries including Brazil and Vietnam.
While retail investors likely won't go out and purchase a bushel of commodity wheat to trade, they can get exposure to the commodities market via commodity ETFs sold on traditional stock exchanges like the NYSE and NASDAQ and other financial vehicles. There are benefits to adding commodities to a retail investor portfolio (such as a hedge against inflation and a typically low correlation with more traditional asset prices), experts caution that commodities are usually volatile investments.
In the Ecuadoran Amazon of the 1800s, shrunken human heads had spiritual significance. As outsiders became fascinated by the exotic practice, head shrinking became commercialized, and counterfeit shrunken heads were common. By the mid-1940s, shrunken heads could be traded for guns.
This tracker shows the current price of common commodities such as crude oil, lumber, nickel, and many more, as well as how much these prices have fluctuated over the past day, year, week, and month.
In the financial sense of the term, commodities must be uniform, interchangeable, and deliverable to meet the classification. That's partly why a crop grown in your backyard might not qualify as a commodity crop.
Just beneath the surface of the global economy is a hidden layer of dealmakers for whom war, chaos, and sanctions can be a great business opportunity—they're called commodity traders. Their power partly stems from the fact that commodities are essentially the building blocks of the economy at large.
That's partly because of all the different ways and places commodities are traded—such as futures exchanges, spot markets, and over-the-counter deals. Additionally, the same commodity can be traded multiple times in different markets, making it easy to risk duplicating trade values in calculations.
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