Commodities are broadly grouped into main categories based on their source and economic use. These categories help traders, investors, and policymakers understand market behaviour and price drivers more clearly.

The first major category is energy commodities. This includes crude oil, natural gas, coal, and refined products like gasoline and heating oil. Energy commodities are essential for transportation, electricity generation, and industrial activity. Their prices are highly sensitive to geopolitical events, production decisions, and global economic growth.

The second category is metal commodities, which are divided into precious metals and industrial metals. Precious metals such as gold, silver, platinum, and palladium are often used as stores of value and inflation hedges. Industrial metals like copper, aluminium, nickel, and zinc are closely tied to manufacturing, construction, and infrastructure development.

The third category is agricultural commodities, also called soft commodities. These include crops such as wheat, corn, rice, soybeans, coffee, sugar, and cotton. Agricultural commodities are strongly influenced by weather conditions, seasonal cycles, and global food demand.

The fourth category is livestock commodities, which covers animals raised for food production, mainly cattle and hogs. Prices in this category depend on feed costs, disease outbreaks, and consumer demand for meat products.

Together, these categories form the backbone of global commodity markets, each responding to different supply and demand forces while playing a vital role in the world economy.