What do commodity exchanges primarily deal with?

Commodity exchanges primarily focus on the trading of physical commodities, such as agricultural products, metals, and energy resources, along with the financial instruments tied to these commodities, particularly futures contracts. Futures contracts allow traders to buy or sell a commodity at a predetermined price on a specified future date, effectively enabling risk management in price fluctuations.

The importance of commodity exchanges lies in their role in price discovery and providing a platform for hedging against risks associated with commodity price movements. By facilitating these trades, commodity exchanges contribute to the overall efficient functioning of markets related to physical goods.

The other options mention financial instruments like equities, foreign currencies, or mortgage agreements, which are not the primary focus of commodity exchanges. Instead, they pertain to stock exchanges, forex markets, or insurance products, respectively, highlighting the specialized nature of commodity trading distinct from these other financial arenas.