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Commodities generally come in two varieties, hard and soft. Hard commodities are those that are extracted from the ground, such as precious metals and crude oil. Soft commodities are those that are grown and harvested, such as coffee, sugar and wheat. For commodities to be tradable over an exchange, they must be certified as being of a standardized quality and quantity. In this way they can be considered as interchangeable with any other commodity of the same kind coming from another producer.


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