Does ownership of a commodity transfer upon sale before its possession, and what is the ruling on selling it after the cancellation of the first contract and its possession? And is it permissible to sell a commodity that you bought from someone who had not yet taken possession of it, and then you took possession of it?

If the commodity is food, then returning it is correct due to the Prophet's prohibition of selling food before taking possession of it. However, if it is other than food, scholars have differed on the permissibility of selling it before taking possession of it. Nevertheless, the preponderant opinion is that it is not permissible to sell anything before taking possession of it. This is the chosen opinion of Sheikh al-Islam Ibn Taymiyyah and Ibn 'Uthaymin. They based their argument on what was narrated from Ibn 'Abbas (may Allah be pleased with them both), who said: "And I do not think anything is إلا like food."

Therefore, your first sale is invalid, and what you did by canceling the transaction is correct. If you buy a commodity from someone who has not taken possession of it, you must return it and inform the seller that the sale is invalid. A new contract should be concluded after he takes possession of the commodity. It is not permissible for the seller to allow you to benefit from it before he takes possession of it, because he does not own it until he takes possession. Lending is only permissible by someone who owns the item or is authorized to lend it.