I am an agri commodity trader in a top firm, ask me anything.
It hard to enough to enter but a while ago I also noticed that not a lot of content is out there to try and help people that are interested in the trade so I wanted to try and answer some questions about the trade for my fellow agri nerds (I have some exposure to other commodities but not enough to satisfy all questions so lets try to stick to agri and later I can ask my energy trader friend to answer some of the other commodities questions)
It’s awesome that you’re opening the floor to questions about agricultural commodities trading! Here are a few questions that could spark some valuable insights for those interested in the field:
Breaking In: What advice would you give to someone trying to break into agricultural commodities trading? Are there specific skills, internships, or networking strategies that worked for you or that you’ve seen work for others?
Daily Routine: What does a typical day look like for you as an agri commodity trader? How much of your time is spent on the phone, analyzing data, or negotiating deals?
Key Skills: What are the most critical skills or traits that make someone successful in this field? Is it more about technical knowledge, relationship-building, or something else?
Market Insights: How do you stay ahead of market trends? Are there specific reports, data sets, or tools you rely on to make informed decisions?
Challenges: What are some of the biggest challenges you face in your role? How do you handle situations where a position is going against you?
Career Growth: What does the career progression look like in agricultural commodities trading? Are there opportunities to move into other commodities or related fields?
Hedging vs. Flat Price Trading: Can you share insights into the differences between trading basis (hedging) and flat price trading? How do you approach each?
Relationship-Driven Industry: Since trading is highly relationship-driven, how do you build and maintain trust with farmers, processors, and other stakeholders?
Small vs. Large Firms: What are the pros and cons of working for a smaller trading shop versus a major firm in the agri space?
Advice for Aspiring Traders: If you could give one piece of advice to someone aspiring to be an agri commodity trader, what would it be?
Feel free to dive into any of these or share your own experiences and tips! Your insights could be a game-changer for someone looking to enter this niche but rewarding field.
Hey, this could be really insightful. You’re correct; there really isn't much content out there. I have many more questions, but here are a few to start with:
Based on what you know now and the predicted future outlook, would you recommend going for energy or agri trading?
How is AI affecting or will affect this industry?
Also, what does the earnings/salary potential look like? Average hours per week?
Thanks!
so the first is a complex question that also depends on who you are and what risks you are willing to take as well as your view of the world, my very personal opinion is that energy trading (the non physical side) is a dangerous bet because from my talks with some very good traders I understood that algos are becoming more and more predominant and this inevitably squeezes the available jobs, so for me its a safer bet to go into agri or metals trading but this also comes at the expense of salary, agri traders make less than energy and thats not a secret (I believe around 20-30% less depending on position) but also agri in my opinion is more fun, you have more trips and also get to taste and learn about actually interesting foods and also develope a passion for them. AI is not an issue in agri, especially coffee, its too human of a business and its extremely fragmented among also small hold farmers, at most it will shape the more manual parts of the trade but I find it hard for it to replace us. average hours depend on position and trading house in mine I can say that a working week for a junior trader is roughly 60 hours a week to 75-80 in busy periods and comp is base for a junior agri trader probably 70-80k euros flat plus 30% bonus in germany so in switzerland its probably 130k chf plus a modest bonus.
Hey mate,
Thanks for volunteering your time to do this, soft commodities are seldom discussed , a couple questions from me:
The soft landscape seems on the outside to be a bit different with market share appearing to be held mostly by the ABCD firms as a result - how do smaller regional players compete?
What is some advice that you deem pertinent to a young person who wants to one day become a material risk taker in any soft commodity?
Thanks!
smaller players don't compete, for example in coffee NKG holds 25% of the market plus LDC, Olam and ECOM together accounting for roughly 60% of market share, other houses will also get squeezed harder and harder post EUDR and we will probably see a further concentration same for all agris probably but especially coffee and cocoa because EU is the biggest market by far for those. For a young professional I would advise to not take risk with his own capital at the start in agri because its a heavy reputation based business where a couple of people manage most of the market and new comers will struggle to even get acknowledged (same for all commodities) and also to make it commercially viable you would need capital to move roughly 80-100 containers a year minimum and a container is around 100k accounting for current prices in coffee so I would get experience in a top house, build an extremely strong reputation and if investors are there and people acknowledge you as an expert in the industry then try something on your own, but its a long journey
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For someone curious about this business, what resources would you recommend they read to get a solid overview?
Also, how small are the small farmers that you work with? does that depend on the crop?
it depends awfully a lot on origins, since I work with extremely big volumes I dont talk with farmers most of the time unless they do at least 50/100 boxes a month of volume at the very least. so we mainly speak with aggregators in origin otherwise you would waste incredible time for one more cent of margin that doesnt make a lot of sense. honestly as for books there is not a lot out there, you need to choose a commodity of focus and then i can help by asking around, but without any indication I cant be of much help
when in coffee we speak about cents we mean cents per pound btw because the arabica futures are priced as USDcents per pound and a standard contract is 37500 pounds (a bit of useful info for new people) and a box is a container
whats your day to day like ? how does it differ from like a regular equity desk?
Hey,
So this past summer I was intering at Parrish & Heimbecker and was told that you cant really prepare for going into commodity trading as I was working near the commodity trading team and my plan was to go back and work and join the team working on hedging and less with the Asia side. How could I prepare before going into work next summer. Would it be looking at certain news affecting the certain commodity group I would be joining or general news / excel work?
Since details on your position are better left off from public forums write me a private message where you explain roughly what you will be doing and I can help. But with hedging you can prepare decently well in advance
How does one break in after missing the grad programme train (first year in equities sales at Morgan) assume I speak a language uniquely specific to coffee trading but yeah is it just networking - how does recruiting work
there isn't any graduate train, its and it will always be only networking and smart positioning
Hey, thanks for posting this,
I interned this past summer at a container shipping company handling their exports for a certain trade lane, and I was hoping to parlay that into an ag trading internship at one of the firms we shipped. Unfortunately, I struck out with all of them and was wondering what the next best steps would be. Also somewhat related, what is your opinion on the University of Geneva's Master of Science in Commodity Trading?
Thanks
It’s hard to go from a pure operation role to a trading post especially if the only experience is an internship, if you are back office in trade of commodities you tend to not be able to move to front office roles you need to find another leverage.
The program sounds interesting and the city is certainly the right one but I am unsure of what it entails so send me a brief description of program, exams and a list of companies you know hire from there. Please do some research on it and then we can talk about if it’s useful or not and if it’s worth the money.
As another physical trader early in his career what's your best advice for getting into a seat where you are able to deploy lots of futures risk? Follow up do you think those roles are worth it or do you see making it into commercial management as the end goal
So as for how to get into a seat where you are able to deploy futures risk it entirely depends on the commodity so if you want a more precise advice tell me the commodity and the country. As for what’s the end goal I can only speak to my self, if by deploying “lots” of futures risk you mean taking a position on futures not as a hedge or a way to control physical risk but as a bet on market movements then it’s extremely risky in most commodities and requires extreme depth into options and all other sorts of tools by which you can play with the risk levels and returns on investment. My personal preference is physical trade with targeted position taking in only futures or options sale so more like an hybrid. (For sure I prefer physical though) Using both though has been a winning strategy in my desk and I find it fun
What do you actually do on a day to day basis? Explain it to us like we are children
Very simple overview is I wake up I eat my blueberry muffin, have some coffee then go to work get my report on crop and other subjects from my analysts based in London, start chatting on the phone with some clients/ producers do usual business so take physical positions either short or long then talk with the other team members and then talk with futures desk and that’s about it. It’s actually funny to see these questions because it’s impossible to explain a day of what any professional in a field as complex as comm trading does because nothing can explain the expertise needed or how the contacts you call were made because that’s just life happening to you in a way and to somebody else in another, but I hope this helps
I currently trade soybeans and have previously traded soybean oil in the US both domestically and to export channels. My goal would be to oversee a team like mine in grains or other commodities and guide merchandising while playing in outright futures and options like you said.
Hey can I dm you? Student here trying to break into commods trading and talked with a couple of folks over at Scoular and The Andersons.
Sure thing
fascinating stuff. how do you deal with fx? are you shipping and moving stuff or just trading it "in place"? what do you think of 24/7 trading?
sadly I am not going to share how I approach trading or fx, but thank you for the interests
all good. can you talk some more about your process? how do you source and confirm views? how do you manage your analysts?
how do you think biotech will affect the agri-complex in the long run ? are traders well versed with chemistry/biology side of things, and do you think it will be a plus for someone to have a background in chemical engg. ( + biotech )
That’s an interesting question, I have people that work for me in the origin countries well versed in such topics but I believe it’s less of a fit for physical or futures trading. It doesn’t mean though that it’s not an interesting profile especially if you present it well in the analysis side and then move to trade laterally. Send me your profile by private message I am quite interested in why you want to do trade and if it could be a fit
I’ve spent the past five years trading sports and prediction markets successfully, with over $10 million in annual trading volume. I’m interested in transitioning into physical agricultural or metals commodities and am looking to start in an entry level merchandising or operations role to learn the business.
How would you suggest positioning that background when reaching out to people in the industry? Would firms see it as relevant experience, and what gaps would I need to address to be a credible candidate? I’d also appreciate any advice on which roles or types of firms to target, and how to build relationships that could lead to an opportunity, and the path you took.
Sports and prediction markets aren't a immediate fit at least in my mind, but it could be because I lack insight on what that entails, please explain to me even in private so I can help better
Thanks for the reply, I really appreciate you taking your time. Sorry I can't PM You directly I'm a new user on the site as your post actually popped up while I was researching.
Most of my work has involved following market activity and price movements, identifying mispriced opportunities, and executing on them. Over time, that has made me comfortable taking calculated risks while staying disciplined and paying close attention to detail.
I'm not sure how relevant it is on the physical side, but I’ve also developed live models for in-play sports and written my own scripts to identify the best available and market true prices, particularly in same-game parlays and combination markets, where correlated events are often mispriced.
My interest in transitioning comes partly from tax considerations and my uncertainty about the long term legal and regulatory landscape for sportsbooks and prediction markets.
I am aware my skillset may not be a perfect fit which is why I really am looking at entry level even though I know I will be taking a severe pay cut for awhile.
I’d appreciate the chance to connect further. As a new user, I’m limited to two messages every few days. If you are willing to would you mind sending me a DM with a better way to connect?
I have 3 questions:
- Is speaking several languages like English, French and Spanish is a game changer?
- How socially driven is being a commodities trader?
- What are the average salaries in Switzerland comparing energy, metals and agri?
Thanks!!
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