How Æxecor’s programming error led to 28000 tons of coal delivered (2009)

Commodity futures are contracts that end in physical delivery (with a few exceptions). However, almost all the times the contracts are closed before the delivery date and nothing "real" happens (except an exchange of money). Still, all books on futures have some kind of warning about having your garden occupied by a delivery of pork bellies (or something else).

Commodities are never virtual, always real. The ultimate source and sink for the commodities that are traded (oil, pork bellies, coal) are actual producers and consumers. Many traders do run warehouses or other storage facilities, so that excess commodities can be held and sold later at a higher price.

It's not stupid that they are in the same system, it's in fact required.

Also, I would expect that commodities traders place massive buy/sell orders all the time -- they make money on small deltas * large volume.

The story may very well be apocryphal, but as other commenters have mentioned, there are many stories out there of traders failing to exit their position before the delivery date and having to "take delivery".