Would you get into commodieties trading?

With all this drama about the commodity crisis and the future projections of shortages, I'm getting more interested in learning more than just the basics of commodity trading rather than M&A or ER. Feels like the minimal amount we learn in business school and internships doesn't give a good picture of the opportunities in this field. For some weird reason, it seems much more exciting to trade oil, metals and all that rather than just pieces of paper to be fair

So anyone has a good take on the future of this industry? 

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Comments (15)

May 1, 2022 - 2:05pm
thoroughbell, what's your opinion? Comment below:

Good rule of thumb, this stuff comes in cycles. When things seem like they have a bright future and everyone is hiring then you should be scared as a new grad. Similarly just a few years ago nobody was hiring and it was all doom and gloom. That all said if you are interested in it why the heck wouldn't you pursue it

May 1, 2022 - 9:22pm
oil_quant, what's your opinion? Comment below:

It's impossible to predict on a long term horizon.  In 2019, everyone thought that volatility was dead because of US production response.  In 2020, everyone thought that peak oil demand was in the past, and oil majors as well as institutional investors embraced ESG.  In 2021, people thought that a new super cycle was in store for energy because US and OPEC were slow to respond.  In 2022, Russia invaded Ukraine (also something no one saw coming) and ESG has dropped off the radar.  Who knows what's next?  I would certainly not put much stock in decade long assessments.

May 2, 2022 - 11:29am
Rotterdam, what's your opinion? Comment below:

I agree with what others have said. You have to pick something because it genuinely interests you. Having said that, I always enjoyed commodities because of how tangible it is and the fact that commodities are what drives the world. Commodities are what feed us, provide energy that has allowed modern society to become what it is, and provide materials to allow us to build all of the infrastructure we have. If prostitutes are the world's oldest profession then grain traders are second. An interesting book just came out and you might enjoy it if you want to read more about the impact that commodities have on geopolitics, world history, empires, etc.

"Oceans of Grain" by by Scott Reynolds Nelson

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May 3, 2022 - 7:14pm
GoodBread, what's your opinion? Comment below:

Exactly. I'd put copper in there with grains in terms of oldest professions.

Point is, there will be times where markets are super hot like right now and times where they will suck like a few years ago, but it's an absolutely fascinating occupation and is likely to always exist in some form or another.

May 5, 2022 - 11:44pm
commoditiesguy, what's your opinion? Comment below:

Lots of commodities guys like to talk commodities up when really we all know IB is better (as long as you are an actual finance type guy and not some work life balance freak) stay in IB dont go into commodities - this is coming from a guy who has spent time at a physical shop + a hedge fund + bulge bracket - message me if interested 

May 6, 2022 - 6:44am
WinnerWinner, what's your opinion? Comment below:

Lots of good thoughts here but there's one big thing that still needs mentioning. If you are looking at a front office role in commodities and focusing on the actual commodity instead of companies involved in the space, its more macroeconomics than finance. Whether Exxon makes money drilling for oil is relatively immaterial, what matters is how much are they producing and what do they expect to produce over the next year, 5 years, etc. Same could be said for miners, electricity producers, and so on. 

If you like economics classes more than finance, it could be for you.

May 8, 2022 - 6:39pm
marcellus_wallace, what's your opinion? Comment below:

Right correct, I see after reading the full message stream now.

Yah I would say micro is supply/demand of an industry. Macro to your point, is trade flows, interest rates, is-lm, gdp so on.

Btw if anyone wondering Trafigura website offers some understanding of the basic logistics and economics too.

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May 8, 2022 - 10:52pm
oil_quant, what's your opinion? Comment below:

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