Best Agricultural Trading Firm (ABCD)
What is the best ABCD agricultural trading firm? This in terms of long term compensation, prestige, growth opportunities and long term resume build. Also is there a particular Agricultural product that is best to start with straight out of college or one to avoid? On another note perhaps a seperate topic but interesting as well - is Ag less "prestigious" or offer less long term compensation then metals/energy?
Cargill.
Thank you for the quick reply - would you be able to go into more detail as to why Cargill is the best? According to glassdoor the starting salary for LDC is higher than for Cargill but perhaps that isnt true or it is but it is due to location (LDC in conneticut cargill in small midwestern towns?).
Also does long term compensation and "prestige" differ between metals and mining/energy and Ag? Does one offer more speculative trading then the other?
Thank you for the quick reply - would you be able to go into more detail as to why Cargill is the best? According to glassdoor the starting salary for LDC is higher than for Cargill but perhaps that isnt true or it is but it is due to location (LDC in conneticut cargill in small midwestern towns?).
Also does long term compensation and "prestige" differ between metals and mining/energy and Ag? Does one offer more speculative trading then the other - Finally i see your in metals so you may not know the answer but is there a particular agricultural product that is best to start in and one that is worst to start in?
Cargill is the tops. They dominate the world of Ag. ADM would probably also be a solid bet but their culture is a lot more corporate than other merchants so you’ve got to decide if you like that. Bunge and Dreyfus are both struggling to adapt to changes in the grain markets. If you get an offer to either I’d still take it. They aren’t going away by any means but they’re facing a lot of pressure from up and coming players. Prestige is irrelevant in physical grain. What matters is balancing getting your own book as quickly as possible with future opportunities. I’d say the top five to be employed by right now in the US are Cargill, ADM, The Anderson’s, Dreyfus, CGB. CHS is also a great firm if you get the right position. I put the Anderson’s third because they’re aggressive and they’re growing. There’s a lot of opportunities there (I don’t work for them but my friends that do have done quite well). A lot will depend on your cultural fit with the company and the role you’ll be taking so by no means are those rankings firm.
I agree with the previous guy saying that Cargill is No.1 but if you look exclusively from money/salary perspective and you want to stay for the long term then you should look for middle sized trading houses (potential IPO, M&A, or where you can climb faster to the top positions).
LuckyTheLeprecon can you tell us more about "changes in the grain markets"... I am not sure about Bunge and their issues related to grain markets trends but the reason why Dreyfus is not anymore the top player is that they have problems with their ownership structure IMO https://www.bloomberg.com/news/articles/2019-11-04/margarita-louis-drey…
and again what is going on in the agri markets that Bunge, LDC can not adapt so easily ?
The whole industry is affected by shrinking margins and diminishing informational edge. The growth of the medium sized interior elevator companies is also not helping the big guys.
Thanks for the info appreciate it. Do you feel that the shrinking margins will be a persistent issue that will effect long term comp? I see you are still in school so maybe you may not have a ton of detail on exact numbers but do u feel this will look like what happened to S&T at the banks where everyone ends up getting laid off and long term growth prospects dont look too hot?
can you elaborate on the elevator comment..?
Dreyfus #1 I say
Good call on Anderson's/Lansing. They have some of the best payouts. 15-20% book guaranteed
I could be wrong for handicapping Dreyfus like that. I haven’t really kept up with what’s going on with them since the trophy wife power struggle and layoffs in their Kansas City office a few years ago. Their traders are excellent though. Early career guys definitly are definitly going to make the most money the fastest at Lansing (That 15% is sweet).
Agreed - can print money there if good (same as anywhere but still)
Out of curiosity why dreyfus?
Any idea of how Scoular is stacked against these guys/how are they doing generally given they don't seem to have as much in terms of assets?
I don’t know anybody that works there but when I worked in Kansas we butted up against them occasionally so I got a taste for their culture. They’re a lot like a private version of the Anderson’s. Medium sized, growing, aggressive, and can promote very rapidly.
I interned at an ABCD and can say from the traders I talked to there and at other firms, Cargill has the best name/reputation. If you want more details you can PM me.
I am a trader at a smaller firm similar to the ABC's doing about 1.5 MMT a year to central america in a niche market if you have any questions you can shoot me a PM.
From what I’ve seen working at a major trading house, the physical cash trading makes very little money, and the cash guys are paid much less than the prop traders. Most of the profits come from understanding the physical to make money on the futures side by trading calendar spreads, crush spreads or trading the Chinese vs the Chicago futures.
With more and more algorithmic and quantitative trading, as well as the widespread availability of information, physical traders have lost the informational edge they once had and are struggling.
Personally I’d stay far away from agricultural commodities, the pay is substantially lower than energy and the outlook isn’t great
There is something to be said for this and I know Cargill distinguishes between traders (mostly paper I believe) and merchandisers (physical). But this is not just an ag thing. The adage that the physical pays for the overhead while paper is where you swing for the fences has been true for a long time in commodities. But the margins in physical have been steadily eroded and unless you are in a huge volume energy market, are sitting on an asset base, or doing something niche, it will be very hard to even pay for overhead (see Noble).
Out of curiosity where did you hear this and what do others in the group think about this? Cargill and other ABCD's do not allow recent undergrads to trade paper until a few years into their career. Goodbread is right that "traders" at an ABCD deal primarily with more paper while "merchandisors" deal with more physical. Big difference in pay there it seems
From what I heard traders 7-10 years in there career at an ABCD can pull in 400-800K. That seems good to me
I would take that with a grain of salt. The people I talked to while interning at an ABCD said they would never be broke but never be rich either. Sure, top guys are making a lot. But a lot of the traders stay in roles for a while, so it isn't a guarantee that you'll get to Geneva or high enough to see the 400k+ payout. Also keep in mind, that at least at some of the ABCDs the move up fast mentality really isn't there.
I worked at an ABCD for a few years and the above is definitely true. High 100s to low 200s is the average for a trader 10 years in. I think it’s improtant to manage expectations because a lot of people come in with unrealistic ideas of compensation and then are disappointed.
To make 400-700k or real money you need to get into a top seat at the commodity level such as head of grains trading USA. To get a seat like that you will need to play the politics right to outmaneuver 20 other intelligent people, will probably need 10 years of experience, and you’ll need to get lucky with the right seats opening up before hand to be in the position to get promoted. People stay in these seats forever so hopefully they retire or leave. Then once you’re in this seat, you not only need to trade extremely well, but you better pray that your assets make money that year. Then, you better pray that other commodities also make money and the trading house as a whole does well. A lot needs to go right for you to get paid and this isn’t a get rich quick career.
With that said, the work is intellectually challenging and your job security is very high for a trader. You’ll also be able to move abroad if that interests you
Like you said, it takes a few years to move from a physical position to a paper position, but the benefit is quick upward mobility within the company, they have pipelines to paper trading for those interested and can make $$$ from trading physical. You are moved around every 2-3 years. From what I've seen for those willing to stick it out, move around, and get results you will get rewarded.
I will say Cargill is my top, they seem the best positioned to be able to adapt to the changing marketplace. im gonna echo Dreyfus and The Anderson's/Lansing as well for other top players
If you have any particular questions, you can reach out to me
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Went through a commodity training program @ ABCD. Still working at ABCD and have been here for ~3-4 years. Here's my $0.02.
Prestige/resume build/name brand - Cargill.
Growth Opps - think the ABCD's are pretty even here - mix of politics, personal ambition, having the right boss, ability to re-locate etc etc. Too many factors here to name one winner. High performers will be rewarded.
Long Term Comp. - Again tough to say. Out of the gate Anderson's, Scoular, Gavilon etc. have an eat what you kill culture still and you can make more if you're succesfull out of the gate (this is rare). ABCD's have structured training programs that are meant to build longer term merchants/traders & leaders. These companies love to promote from within and there is a ton of diff. areas and opps to make solid money.
Best Ag Products? - Might be biased... but soybeans/ oilseeds i find interesting and a very global mkt, where you can learn a ton about economics, politics, trade flows that are applicable across commodities. I also think the vegetable oils mkts are super interesting from a personal standpoint. (rape, sun, palm, soy oils etc).
Is AG less prestigious than metals/energy? - Interesting question. I don't know how to answer this but i'll give it a try this way. The avg ag trader will make less than the avg metals or oils trader. The avg ag trader will have a better work/life balance than metals/oil. Prob the best i can do to answer this question.
Any other q's let me know and i'll give em a shot
Anyone have any thoughts on ddg’s? Is it a good product to be on?
DDG’s are a protein source, similar to soybean meal. There’s always a market for protein. A DDG trader would have a very similar role to any other meal trader in the industry.
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