How many types of commodities are there? Basic understanding for traders

Getting to Know Commodities in the Trading Market

Commodities are goods with high demand in the industrial and agricultural sectors. Trading typically occurs in large volumes as wholesale rather than retail. Trading commodities is not limited to holding physical goods; most traders use (Futures Contract), where traders agree to buy or sell a product at a predetermined price on a specified date. This approach helps traders hedge risks and profit from price movements.

Commodities are divided into two main groups

###Heavy Commodities: Natural resources with value

Heavy commodities are obtained through mining or direct extraction from nature. This group includes products that are vital to the world, such as:

Energy Sector – Crude oil, natural gas, and other energy products serve as fuels for industry and consumption.

Basic Raw Materials – Including gold, silver, copper, aluminum, and other natural minerals that form the foundation of industrial production.

###Light Commodities: Agricultural and livestock products

Light commodities are derived from cultivation and animal husbandry, with high diversity, such as:

Agricultural Products – Including sugar, corn, coffee, wheat, and other crops.

Livestock Products – Cattle, milk, beef, and other products from warm-blooded animals.

Each commodity group has specific factors influencing pricing and market dynamics, allowing traders to choose strategies suited to the characteristics of each product.