Soft commodity Soft commodity Soft commodities, or softs, are commodities such as coffee, cocoa, sugar, corn, wheat, soybean, fruit and livestock. The term generally refers to commodities that are grown, rather than mined; the latter (such as oil, copper and gold) are known as hard commodities. Soft commodities play a major part in the futures market. They are used by farmers wishing to lock-in the future prices of their crops, by commercial purchasers of the products, and by speculative investors seeking a profit. Sometimes the term "soft" is restricted to commodities which are identified as primarily tropical, such as coffee, cocoa, sugar,
Commodity currency deflation. This can have negative or positive effects depending on whether the currency was overvalued or not, deflation can either be positive or negative in the long run as suggested by the effects section of the deflation article. It is important to note that while countries with commodity currencies benefit from the higher demand, countries that import this commodity face the opposite effects. Commodity currencies nature can allow foreign exchange traders to better gauge the value of a currency and predict the movements within the markets based on the perceived value of the commodity to which the currency is tied.