What is a Commodity? A commodity is defined as a tangible good that can be bought and sold or exchanged for products of similar value, it is usually used as a raw material for the production of goods or services. In the financial market, commodities refer to commodities that are homogeneous, tradable, and widely used as basic industrial raw materials, such as crude oil, non-ferrous metals, steel, agricultural products, iron ore, and coal. Commodities that are traded are typically sorted into three broad categories: energy, basic raw materials and agricultural.