What is the difference between physical and financial commodities?

Physical commodities are tangible goods that are produced, bought, and sold, such as agricultural products, metals, and energy resources. Financial commodities, on the other hand, are contracts that represent the value of a physical commodity or a basket of commodities. These contracts, which are also known as derivatives, are traded on commodity exchanges and can be bought and sold by investors. The value of financial commodities is derived from the underlying physical commodity and is influenced by factors such as supply and demand, geopolitical events, and economic indicators.