Just joined an entry level role in a mid sized shop doing physical trading agricultural products (grains and oilseeds), and i'm just wondering about the long term prospects of pursuing ags as a career. For the more experienced guys in the business - would you recommend someone to get into ags now? Why or why not? Also, I get that oil and gas provides the most in terms of compensation and salaries, and pardon me for the obnoxious question, but how much can a soft commodity/ags trader potentially make in base and bonus Is the work to pay ratio going to be similar in ags as it is for O&G?
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Hey DtimesDmeasures, sorry about the delay, but are any of these useful:
Fingers crossed that one of those helps you.
I’m a grain trader trainee (For two more months!) at a second tier grain trading house. As part of my traineeship I’ve rotated through a few desks and departments so i at least have seen a few different angles.
The grain industry is still a great place to be. You’re not going to make a fortune by the time you’re thirty but I’ve worked with plenty of traders pulling in 150-500k before the age of 30. Most at the firm I work at clear around 250k by their 5th or 6th year at the company. A top performer could easily be making over a million a year at that point. I’ve only met two such people so it’s not common but it’s possible. From what my friends in energy tell me those numbers roughly stack up with what people at energy firms make. Entry level pay at energy trading firms starts out significantly higher than entry level pay at ag firms but most ag firms will give you your own book sooner. High performing energy traders have significantly more upside potential than ag traders but unless you plan on being the next Marc Rich I wouldn’t worry about that. Hours wise, it’s impossible to say your hours will vary based on your product and location. In general it seems like I have better hours than my friends in energy but during harvest 90 hour weeks do occur.
The two things I could see affecting your decision are location and early level work. Ag trading companies are almost all in the Midwest. Many facilities are in rural areas. Offices are located mostly in Minneapolis, Kansas City, and Omaha. Not as majestic as larger east coast cities. As an entry level merchandiser you’ll be either pounding the phone or doing manual labor. Loading trains, flipping trucks, grading grain at the scale. This becomes a smaller and smaller part of your job as time goes on but if you’re allergic to manual labor (Or gluten) it could be a reason to choose energy over ags.
Sorry for that meandering wall of text. I’ve been loading a train since 4 am. If you have any other questions feel free to ask here or to dm me.
You're also not going to make 250k+ unless you're managing a region like running north american grains/asian oilseeds etc. The truth is every commodity will have 1-2 key decision makers who take home a percentage of pnl for the entire book. The other 5-20+ traders underneath them tend to be carrying out the strategy from the top. They might have some discretion on when to originate and what px to make a sale, but the pnl isn't really theirs and they aren't compensated as such.
To be successful you're going to need some mixture of getting lucky like your boss leaving after a few years and taking his spot, or playing the politics well for 10+ years to get a seat where you can make real money. Very popular to try to jump to a hf after a few years, or leave the industry to do something else as people get frustrated with the low pay
That’s interesting, I know for a fact that those numbers are true. I’m not trying to be an ass- I’ve just seen differently. It could just be differences between companies or my view is skewed by a small sample size. All the desks/Elevators I’ve worked at have been relatively new (
Also work at ABCD. This is bang on.
I don't reside in the US so i'm not sure if the compensation levels are the same in Asia or Europe for example? 250k in 5 to 6 years i would say sounds unheard of from what I know, but i'm not too concerned about that, i guess it would be the 8 years and above that would matter more. Getting 110-175k with 5-6 years of experience under your belt is also very impressive based on what i know traders with almost 5 years of experience are making in ags.
Also, What do people generally do if they leave the industry?
Qui asperiores quo quidem quam sit rem sed pariatur. Earum occaecati vero dicta asperiores.
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