Soft commodities are agricultural products that are grown rather than mined. They include items like coffee, sugar, cotton, and wheat. These commodities are typically traded on exchanges and are essential for food production and various industries. The prices of soft commodities can fluctuate based on factors such as weather conditions, supply and demand, and global economic trends. Investors often trade these commodities to hedge against inflation or to speculate on price movements, making them an important part of the financial markets.