What are commodities stocks

Commodities stocks are shares in companies that are involved in the production, refining, or distribution of raw materials used in other businesses. These stocks are influenced by the price and demand for the materials the company produces.

1. **Energy Companies**: Exxon/Mobil, for example, is a commodities stock as it is involved in the production of oil, which is a raw material used in the manufacturing of goods and services.
2. **Mining Companies**: Rio Tinto is another example of a commodities stock, as it is involved in the mining of metals like gold, which is a hard commodity.
3. **Agricultural Companies**: Archer-Daniels-Midland (ADM) is a commodities stock, as it is involved in the production and distribution of agricultural products like wheat and corn.

Investing in commodities stocks can provide exposure to the prices of raw materials, which can be volatile and potentially offer a hedge against inflation. However, these stocks are also subject to the risks associated with the commodities market, such as fluctuations in prices and supply chain disruptions.