Commodities are raw materials or primary agricultural products that can be bought and sold, such as gold, oil, and wheat. They are typically categorized into two types: hard commodities, which are natural resources that must be mined or extracted (like gold and oil), and soft commodities, which are agricultural products or livestock (like wheat, corn, and soy). Commodities are globally traded and often serve as the basis for various derivative instruments, providing critical benchmarks for pricing in various economic sectors.