Commodities are items found in nature or that can be easily made. They are made and sold by various companies around the world. The quality of a commodity does not differ depending on which organization sells it. One company’s commodity is not distinguishable from another’s, from a quality standpoint.
Examples of commodities include milk, gold, petroleum, and crop products like soybeans, rice, sugar, and coffee beans. The prices of commodities are frequently higher than their marginal production cost. This is due to the abilities of the company producing the item and the barriers to entry into the market. The price of a commodity good is determined as a function of the market for the item.
Rising commodity prices can influence the value of a unit of currency. For example, Canada exports commodities such as timber and natural gas to the U.S. When the U.S. has increased demand for timber, timber prices rise and more timber is used. When a Canadian company sells more timber at a higher price to America, the Canadian dollar rises in value compared to the U.S. dollar.
To find the prices of commodities, individuals can go to an investment-related Web site like Yahoo! Finance and search for commodities futures. They can then see the near-term futures price, which is the price usually quoted in the media. Sites such as CNNMoney.com display the latest trading prices and related data for commodities.
Bloomberg Academic and Bloomberg Professional also contain data on commodities prices. Those seeking historical prices of commodities can refer to Global Financial Data or the CRB Commodity Yearbook. The USDA National Agricultural Statistics Service provides worldwide prices, yields, and production data for agricultural commodities. Individuals can also refer to the USDA Foreign Agricultural Service PSD Online. The U.S. Geological Survey provides price information regarding minerals and metals.
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