Commodity \Com*mod"i*ty\, n.; pl. Commodities. [F. commodit['e], fr. L. commoditas. See Commode.]
1. Convenience; accommodation; profit; benefit; advantage; interest; commodiousness. [Obs.] Drawn by the commodity of a footpath. --B. Jonson. Men may seek their own commodity, yet if this were done with injury to others, it was not to be suffered. --Hooker.
2. That which affords convenience, advantage, or profit, especially in commerce, including everything movable that is bought and sold (except animals), -- goods, wares, merchandise, produce of land and manufactures, etc.
3. A parcel or quantity of goods. [Obs.] A commodity of brown paper and old ginger. --Shak.

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A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market. Commodities are often substances that come out of the earth and maintain roughly a universal price. The price of copper is universal, and fluctuates daily based on global supply and demand. Stereo systems, on the other hand, have many aspects of product differentiation, such as the brand, the user interface, the perceived quality etc. And, the more valuable a stereo is perceived to be, the more it will cost.

In contrast, one of the characteristics of a commodity good is that its price is determined as a function of its market as a whole. Well-established physical commodities have actively traded spot and derivative markets. Generally, these are basic resources and agricultural products such as iron ore, crude oil, coal, salt, sugar, coffee beans, soybeans, aluminium, copper, rice, wheat, gold, silver, palladium, and platinum. Soft commodities are goods that are grown, while hard commodities are the ones that are extracted through mining.