| Also called softs, the term generally refers to commodities that are grown, rather than mined (hard commodities). For instance, tropical commodities such as coffee, cocoa, sugar, orange juice, lumber. These are assets that have more than one utility - they’re not just instruments to be traded in the market.
The resources are items with characteristics that remain unchanged across the market and can, therefore, be traded on a commodity market in a similar manner as equities and currencies are transacted. While the value of hard commodities can be impacted by climatic occurrences, the soft commodities sustain the biggest fluctuations when agricultural variables shift...............................................Full Article: Source
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