In capital markets, commodities are the only physical items to be purchased and sold on an exchange. Most often mined out of the ground or extracted from the sea, they sit at the beginning of the supply chain, before being sold at greater values to producers, manufacturers, retailers and finally, to consumers.
Commodities are often mass-produced and standardised for quality and quantity; consequently, they’re priced the same regardless of who produced them. Commodities are traded on a commodity exchange (oil, corn, copper etc.), and their prices fluctuate daily and can provide high volatility levels.