Why everyone wants to get out from Ags?
Basically the title.
I have found a lot of threads in this and other forums about people wanting to transition from ags to metals/energy.
I'm not talking about the random 22-year-olds that only have offers from the middle of nowhere and want to transition to the sexy oil jobs. I'm talking about people with solid careers in ags/softs.
First of all, WHY?
Secondly, do you think ags/softs are still promising (salary-wise) or it's better for me to dump commodity trading in general because the information is all over the place and traders have no edge? The truth is that there is no actual trading nowadays. Everyone has his own production and sells his own product.
I think a lot of it is driven by the money and pace of work. As you get into your career in ags you realize more and more that the money isn't as good as oil/metals and its a much slower pace. Naturally, as people experience this and see their income come is less than oil/metals guys that they read about year after year, there is going to be some investigation into what they would need to do in order to have that higher income.
From the slower pace part, as you spend more time in the market and realize that you have learned quite a bit that learning curve starts to flatten out. It is natural to want to move somewhere you can still keep up that learning curve steep considering most traders consider learning to be enjoyable. Since oil/metals are known to be fast paced, and something new, I think that is enticing to a lot of people as well.
It's all subjective to what a trader wants in his or her career. If a person wants more money (more stress) and is motivated to go find it, they will. There will always be a need for people in all spaces of physical trading (ags, metals, energy), I don't believe there is an "extra edge" in a specific sector.
It's about cargo value. Oil > metals > ags/softs. So that's about the order of average pay in each sector. Takes about the same amount of work to book a shipment but the amount of money on the table is vastly different.
No. Every trading firm invests in assets. Profit margins through trading only are getting smaller every year. They know they have to become supermajors in order to survive.
I could be wrong because I don’t know much about metals/oil but it seems like there’s a much larger variation between desks in Ag’s. Once you get to mid career it can be several years before even a good trader can get the oprotunity to change desks. The culture, pnl, and the requirements of a product might just be a bad fit and they want out in any way they can.
Less and less you have people being successful in trading, especially in Ags. Traders see they have longevity in oil and metals so naturally they'll move on to that.
I wouldn’t say that. Ag’s have had an exceptionally rough couple of years and are now bouncing back. With that said, they are definitely being streamlined. There are just too many mid level traders to share the (relatively Smaller) pie with but that’s changing pretty quickly as firms adapt to the increased efficiency and transparency in the current market. Honestly I’d say Ag’s are a great place to be for the foreseeable future theyre still more opaque than other commodities. Another thing to consider is the insane level of job security for grain traders. If you’re halfway decent and willing to live in the sticks you pretty much are guaranteed employment either at a grain consumer or a coop.
How can someone adapt to this situation? Everyone is producing everything like crazy and everyone becomes more efficient. Weather seems to have less and less impact because of the genetics of the seeds.
Well, i have a guaranteed career in software engineering. Idk why i should go for Ags if at least the pay is not better. Is it?
There aren’t a ton of good metals seats at the big guys, it’s very much winner take all. Lots of scraping by years and a big one every now and then. There are quite a few jobs focusing on niche customers and scrap though, but that’s inherently a lot more entrepreneurial.
I might be wrong but power and gas seem to me like the deepest fields in terms of variety of places you could go and still make a decent living in commodities.
Interesting. So how can someone become a scrap trader? I thought those guys make peanuts.
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