The ABCDs
With Archer Daniels Midland, the world's largest grain processor posting a 37% increase in 3rd quarter profits I am reminded yet again...of how much we ignore commodities in the world of finance. Even in the midst of a commodity bubble which is seeing the explosion of everything from corn to copper, few people on WSO seem to know their ABCDs.
So many of you ask questions every day about breaking into the industry and making smart choices, yet very few of you every ask about 4 huge actors in the industry. However natural it may be to think of Wall Street specific institutions, these four firms will be just as big if not bigger players in financial markets over the coming decades.
Ignore them at your own peril, monkeys. It really is as simple as...
A, B, C and D
The Commodity Kings
1) A-Archer Daniels Midland, based in Decatur, Illinois. Specializes in grains, but will give any noice merchandiser (read, TRADER) a mean set of option trading skills, not to mention the chance to live like half-a-King on a starting salary of $50K.
2)B- Bunge, based in St.Louis but arguably more global than any Bulge Bracket bank. Agribusiness, food additive and animal feed giant. For those who realize that commodity volatility is a reality and no longer a trend...keep this name in mind. Especially, if you have an interest in alternative energies.
3) C- Cargill, based in Minnetonka, Minnesota. Arguably the world's most influential financial commodities firm. Do I stutter? Black River anyone? Been to South America? You can learn more about the real global economy in a few years at Cargill than you can as a fly-on-the-wall of the World Bank in a decade. From ops people to quants to strategists. Research this place and apply...if you haven't already.
4)D- Dreyfus, based in Paris, France. Not only responsible for the stardom of one elf bodied woman, but still the remaining owner of pipelines from the French Colonial Era! Dabble in everything from metals and oil to transportation and softs. Offices in New York, Sao Paulo, Beijing and Geneva...and no, these are not just regional way stations.
There is your scratch of the surface. There are many similar companies out there which would make a great launching pad into industry for you. Personally, I would put up a finance career at an ABCD vs. any BB or MF. Feel free to contradict or add more quality commodity firms to the list.
Excellent post.
A trader at ABCD will receive a very comprehensive skillset.
Midas, this seems like a great insight for widening career options; in terms of the macro economics associated with supply and true demand(re: not froth from excess speculation via futures/options etc) these places probably offer more insight into the commodity markets than a million dollar seat at the merc.
What about the name of the day/week: Glencore? ... they have a finger in many pies
Patience, patience. Coming soon...
I'm sure you can learn a lot about the global economy while working at Cargill, but it will still pale in comparison to what you learn at a top macro hedge fund like soros, moore, tudor, bridgewater, brevan howard.
Regarding the lifestyle commentary on ADM - you are correct and incorrect. I interned at a different large company in Decatur and lived there for a summer.
First of all Decatur is an ABSOLUTE SHITHOLE. I always refer to it as the armpit of America and I firmly believe that. It is an older run down town with a lot of poverty. There really isn't much there. Also, the town seriously smells awful. I don't mean dirty like many cities, I mean AWFUL. The corn processing at ADM is really a terrible smell and depending on the wind the entire town can be unbearable.
However, you are correct that you can own the town on a very minimal salary. As interns making ~$20/hour we really lived like kings (relatively). We were out at the bars and restaurants and really had a great summer.
There is are much better living options if you like more rural areas. I still remember going to a party at our Sr. Manager's house. He lived 10-15 min outside of Decatur on a beautiful lake. He had an amazing house on a few wooded acres with boats, jet skis, etc... All this on probably $130k salary (his wife stayed home with the kids).
Nice, I wish they have offices in Canada... We only have wheat and beef here.... only one exchange for commodity...
I hope you are joking my friend. I am not going to do all of the research for you but quick google searches would suffice. Cargill alone has ~100 offices in Canada. I am sure the others do as well and they offer plenty of careers.
http://www.cargill.ca/canada/en/home/careers/index.jsp --> This should get you started.
Also, commodities represent something like 25% of Canada's exports (think Oil/Forestry out West, think Wheat in the Prairies, think Nickel and precious metals in Quebec/Ontario, etc. etc.) --> http://www40.statcan.gc.ca/l01/cst01/gblec04-eng.htm
I think Midas has a good point about careers with many of these companies and like he said, many of them remain unknown to people or just ignored. I was one of these people before having exposure to the mining industry last summer. I wouldn't recognize a lot of the names then but now realize that they have major clout worldwide and have extensive operations that go far beyond just digging up some earth and extracting some metal for example. I think they even represent a good exit opportunity after banking for people who want to get out of the grind but might not want to branch out and do their own thing. Have people considered this route?
If you are serious about commodities, Canada is definitely a major player and you shouldn't have a problem finding something here.
Good luck!
Any particularly strong CTAs to look into?
Anyone heard of Gavilon...sounds to be similar to Dreyfus. Pretty big on the Ag side and growing in Energies..
Shoot me a PM
Midas, can one trade commodities on their own? Or do you pretty much have to work for one of these firms?
if one can confiscate himself a small country or at least a few mines, why not? all jokes aside. i recommend going the futures/options route, (but don't let me stop you from getting your CTA if that's what your heart is set on) really not much difference from trading equities in this regard as long as you're not holding the physical commodities themselves.
Great Post. If I had any SB's, I'd throw one your way. Checking all four out tonight
Nice heads up! looking forward for more half-king opportunity. Thanks!
very strong list and just to be clear.. it is HARDER to get a job at this shops then a bank... I love the kid who says if JP does not work out I will JUST go to LDH.... SURE YOU WILL
Yup...Before I started at my current boutique I actually interviewed with Bunge on campus for a trading position with an executive (forgot his exact position) for a first round interview. Didn't even get a callback
then what are some lesser known shops that have a better chance for those students without a perfect GPA and from non-targets?
P.S. I live in canada btw
what are the "career paths" when you join one of these firms?
keep in mind you dont have one in most jobs outside of banking.. any trading analyst hires may never trade.... the career path is get in and work hard... see where your career and market takes you
Koch industries also does a lot of commodity trading, could be a good place to work if you're a libertarian and want to support the movements daddy.
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