Softs
Agricultural commodities that are grown rather than mined or extracted — primarily coffee, sugar, cocoa, cotton, and orange juice, traded on ICE Futures.
Softs (soft commodities) are a subset of agricultural commodities grown in tropical and subtropical regions. The main softs are coffee (arabica and robusta), sugar (raw and refined), cocoa, cotton, and frozen concentrated orange juice (FCOJ). Most trade on ICE Futures US.
Softs are highly sensitive to weather in key producing regions: Brazilian frosts in coffee, West African harmattan winds in cocoa, Indian monsoon in sugar. Geopolitical disruptions in producing countries add to volatility.
Because production is geographically concentrated, softs can experience supply shocks that persist for crop-cycle lengths (one to two years), creating extended price moves unlike energy markets that respond within weeks to production changes.
Related Terms
Agricultural Commodities
Farm-produced goods traded on futures exchanges — grains (corn, wheat, soybeans), oilseeds, and livestock — with prices driven by weather and seasonal crop cycles.
BeginnerCommodity
A raw material or primary agricultural product that is interchangeable with others of the same grade and traded on organized exchanges.
BeginnerSeasonality
Recurring, calendar-driven price patterns in commodities caused by predictable cycles in supply (harvest) and demand (weather-driven consumption).
IntermediateSupply and Demand Balance
The net difference between commodity production and consumption in a given period — a surplus weakens prices; a deficit strengthens them.
Intermediate