Commodity

From Reuters Financial Glossary

A natural raw material used as a foodstuff or in manufacturing. Classified in the following groups: oil and gas metals; grains and oilseeds; soft commodities such as sugar, cocoa, coffee and tea; plantation crops such as rubber, palmoil, cotton and wool. Exchange-traded commodities are quoted in specific lots of a specific quality for specified delivery, and usually also trade in forward, futures and options contracts. Commodities traded outside organised exchanges usually change hands by direct contact between individual producers and individual end-users. The contracts are tailor-made for each deal and are often signed for a long-term continuing supply.