What are soft commodities?
Soft commodities are natural, cultivated products such as sugar, wheat, corn, palm oil, soybeans, livestock, and more. They’re informally referred to as ‘softs’. The key feature of soft commodities is that they’re grown (and nurtured or raised), not mined.
With soft commodities necessary for daily sustenance, their availability, and lack thereof, offer an opportunity for traders to speculate about their future. This is because soft commodities face many risks that affect their delivery, such as irregular weather patterns and soil degradation – which cause uncertainty in the market.
More detailed examples of soft commodities follow in the table below.
