What Are Commodities? :: Commodity Price Index

After reading the first article in this series you will know the answer to the question “What is a Commodity?”. In the second article you found out how commodities are traded. In this article you will discover what products are classified as commodities.

Commodities are categorised into a few major headings in order to make it easier to determine price comparisons, research and other conveniences in trading. You will note that the definition of commodities is broadened on the commodity exchanges to encompass processed products albeit traded in large quantities.

The commodity exchanges have also, more recently, encompassed the trading of contracts in financials and telecommunication products which do have inherent similarities in trading terms to the more traditionally defined commodities.

The major headings are:

Softs – commodities that are grown i.e. agricultural commodities

• Grains and Spices - Wheat, Oats, Corn, Rough Rice, Soya Beans (Soybean), Sesame, Barley, Maize, Haricot Beans, Rapeseed, Distillers Dried Grain, Azuki (Red) Beans, Castor Seeds, Cotton Seed, Mustard Seed (Jaipur), Mustard Seed (Sirsa), Soy Seeds, Sesame Seed, Cardamom, Jeera, Pepper, Red Chilli, Yellow Peas, Chana, Masur, Cashew Kernal, Arecanut, Pepper, Gur, Jeera, Masoor Grain, Turmeric, Urad (Black Matpe), Yellow Red Maize, Green Bean, Guar Seed

• Meats - Live Cattle, Feeder Cattle, Frozen Pork Bellies, Lean Hogs, Frozen Shrimp

• Tropical Beverages – Frozen Concentrated Orange Juice (FCOJ), Coffee C, Coffee (Arabica), Coffee (Robusta), Cocoa, Tea

• Vegetable Oils - Soybean Oil, Crude Palm Oil, Castor Oil, Coconut Oil, Groundnut Oil, Mustard Oil, RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Rice Bran Refined Oil,

• Agricultural Raw Materials – Cotton No 2, Rubber, Wool, Lumber, Raw Silk, Mulberry Green Cocoons, Raw Jute

• Agricultural Products – Sugar No 11, Sugar No 14, Sugar M-30, Sugar S-30, Class III Milk, Class IV Milk, Soybean Meal, Soybean Crush, Skimmed Milk, Non-fat Dried Milk, Dry Whey, Butter, Cheese, Softwood Pulp, Hardwood Pulp, Eggs, Raw Sugar, Coconut Cake, Rice Bran DOC, Soy Bran, Guargum, Gurchaku, Mentha Oil, Potato (Agra), Potato (Tarkeshwar), Jute Sacking Bags, Malting Barley, White Sugar, Kapasia Khalli

  Hards – commodities that are extracted

• Metals – Gold, Platinum, Palladium, Silver, Copper, Lead, Zinc, Tin, Aluminium, Aluminium Alloy, Nickel, Cobalt, Molybdenum, Recycled Steel, Uranium, Ferrous Scrap

• Fuels - WTI Crude Oil, Brent Crude, Heating Oil, Propane, Natural Gas, Ethanol, Electricity, Biofuels, Gulf Coast Gasoline, RBOB Gasoline, Light Sweet Crude Oil, Russian Export Blend (REBCO), Gulf Coast Sour Crude Oil, Angus Sour Crude Index, European Gasoil, Gulf Coast Harbor ULSD (Ultra Low Sulfur Diesel), NY Harbor ULSD, Coal, Kerosene, Dubai Crude, Oman Crude Oil, Furnace Oil

• Minerals – Salt, Investment Diamonds

• Other – Polypropylene, Polyethylene (LLDPE), PVC, Water

  Financials

• Foreign Currency (FX)

• Indices – Commodity Indexes

• Interest Rates

• US Treasury Bills

• Environmental – Carbon Offsets, Renewable Energy Certificates, White Certificates

  Telecommunications

• Cell Phone Minutes

• Bandwidth

  Other

• Freight

  Each commodity has its distinctive ‘tick’ (minimum price change, set by the exchanges) and standard contract size. A standard contract size is the amount covered by a standard futures contract.

Physically traded commodities are those that will be delivered on a spot basis or against a contract of delivery.

The commodities that are classified as commodities in the physically traded marketplace are mostly more traditional commodities and all raw materials that are produced from the earth but not traditionally or necessarily traded on a commodities exchange.

Again these can be grouped within similar classifications as for future traded commodities but do not include those in the “Financials” and “Telecommunications” categories.

The major headings are:

1. Softs – commodities that are grown i.e. agricultural commodities

• Grains - Wheat, Oats, Corn, Rice, Soybean, Barley, Buckwheat, Millet, Oats, Rye, Sorghum

• Tropical Beans - Coffee, Cocoa

• Agricultural Raw Materials – Cotton, Rubber, Sugar, Tea

1. Hards – commodities that are extracted

• Precious Metals – Gold Bullion, Gold Dust, Platinum, Palladium, Silver, Rhodium, Indium

• Non-Ferrous Metals - Aluminium, Copper, Lead, Tungsten, Tin, Titanium, Tantalite, Chromium, Manganese

• Ferrous Products - Iron Ore, Steel Billets, HMS I & II (Iron Scrap), Pig Iron, Used Rails

• Fuels - Crude Oil, Petroleum, Heating Oil, Diesel Oil, Gasoline, Propane, Natural Gas, Liquid Natural Gas (LNG), Liquid Petroleum Gas (LPG), Coal

• Minerals – Salt, Sulphur, Rough Diamonds, Cut Diamonds, Other Precious Stones, Urea, Cement, Bitumen