img_22092016_215102 Rice Red Chilli Cotton US Oil Gold Wheat Palm Oil Silver Introduction:

A commodity market trades in primary economic sector rather than manufactured products. Soft commodities are agricultural products such as wheat, red chili, rice and sugar. Hard commodities are mined, such as gold and oil. Investors can access about 10 major commodity markets worldwide with purely financial transactions increasingly outnumbering physical trades in which goods are delivered. Futures contracts are the oldest way of investing in commodities. Futures are secured by physical assets.Commodity markets can include physical trading and derivatives trading using forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.