Commodities desk ranking

Guys,

What's your ranking of commodities desks? I think GS, MS, JPM and BarCap should be the top four. Any ideas?

Also, when it comes to each products (Energy, Metals, Ags), how does the ranking look like? Any European bank is strong in this space?

Just wanted to open a topic on commod here. Don't think we have a lot of commod people on this forum.

Cheers.

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Comments (53)

Apr 29, 2012 - 5:43am

If you've been paying attention to the news lately, Barclays and particularly JPM have been killing it whereas GS and MS are slumping. I wouldn't make too much of a big deal out of it unless you get an offer to multiple groups. The commodity desks on the Street mostly focus on energy and their ag desks are way behind the ABCD as far as I can gather. European banks are big into financing commodity trading, particularly BNP, Deutsche and up until recently Credit Agricole.

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Apr 29, 2012 - 11:36am

Barclay's metal desk was shut down last year after they lose hundreds of millions on a copper trade.
Goldman Sachs has had a lot of there top commodity traders leave in London. Although Goldman is still strong in s&t it is not the same firm it was in 2007.
Morgan Stanley has a very large physical oil trading desk in London and is pretty strong in commodities.

Right now the undisputed king is JP Morgan. They have the largest share in commodities and have some very talented traders on there desk.

Another thing to notice is that banks are losing there top traders to independent shops like Glencore, Noble, Vitol. In the case of Goldman there starting there own hedge funds

Apr 30, 2012 - 1:09am
jimz:
Barclay's metal desk was shut down last year after they lose hundreds of millions on a copper trade.
Goldman Sachs has had a lot of there top commodity traders leave in London. Although Goldman is still strong in s&t it is not the same firm it was in 2007.
Morgan Stanley has a very large physical oil trading desk in London and is pretty strong in commodities.

Right now the undisputed king is JP Morgan. They have the largest share in commodities and have some very talented traders on there desk.

Another thing to notice is that banks are losing there top traders to independent shops like Glencore, Noble, Vitol. In the case of Goldman there starting there own hedge funds

jimz, i can't agree more. I think GS is definitely downward sloping. An industry trend is all banks are trying setting up or strengthening their physical business which has a larger margin.

Apr 29, 2012 - 2:31pm

What about non-energy -- do the big banks do any of that really? maybe structuring for corporates, producers etc? I'd assume it's a less sexy job, but people always need food. anybody know anything about commodities as places like macquarie, wells fargo, bnp?

Jul 25, 2013 - 5:56pm

Best commodity shop/product to work at/with? (Originally Posted: 04/21/2012)

Hey guys,

I've spent the last few months at a boutique commodity trading firm trading ag products and I really like this field. I know I want to continue as a commodity trader I'm just not sure what path I should shoot for after graduation. Although I definitely want to stay working on the physical side.

On the ag side for instance ADM has traders who really only need to see one side of the market as they are orginating product and need to move it so they are always bullish/rely on forward contracts to "go short" while at my current shop we don't originate anything and I can just as easily go long/short based on what I feel the market will do and that is the type of role I would ideally like to be in long term.

Does anyone have any insight on what large shop would be the best to work for in terms of culture and compensation assuming you never reach "partner level" and your compensation is based entirely on your performance? Also, what products have the brightest future, is energy really the be all end all?

Thank you.

Jul 25, 2013 - 5:57pm

Glenstrata brah!

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]
Jul 25, 2013 - 6:00pm

I wouldn't be in a rush to join the large firms...they typically hire only experienced traders (for the big comp) and it might be better to cut your teeth at your current shop

Jul 25, 2013 - 6:01pm

top firms for commodities trading (Originally Posted: 07/28/2007)

I'm interested in joining after undergrad a commodities sell-side desk, in particular for power, natural gas, etc, basically energy derivatives (no soybean hedging for me). My background is an internship at a BB top in equity derivatives, focusing primarily on correlation products.

First off, how's the outlook for energy derivs? Which firms, in which locations, have the strongest desks for trading energy?

  • 1
Apr 30, 2012 - 1:15am

Thanks for everyone replying to this thread.

Anyone familiar with commodity index business (some banks call it commodity investor business) ? Who's the king in this business? What do you think of the structuring role (the strategist who designs indexes)? Is it a valuable job/experience?
Seems this business only deals with lazy money (pension fund, mutual fund, etc.), do not have much link to hedge fund strategies.

Apr 30, 2012 - 3:56pm
killnba:
Thanks for everyone replying to this thread.

Anyone familiar with commodity index business (some banks call it commodity investor business) ? Who's the king in this business? What do you think of the structuring role (the strategist who designs indexes)? Is it a valuable job/experience?
Seems this business only deals with lazy money (pension fund, mutual fund, etc.), do not have much link to hedge fund strategies.

Anyone can comment on the commodity index structuring and designing role? Is this a valuable experience for entering into hedge funds, say CTAs or global macro funds?

Thanks everyone.

Jul 25, 2013 - 6:02pm

as long as there's geopolitical strife, energy is going to be pretty hot... other than the usual suspects (j aron, morgan stanley), bank of america and deutsche bank have fairly strong natural gas desks.. though Foster Smith of DB is moving to JP Morgan to head their gas and power trading desk. along the same lines, jp morgan is apparently looking to greatly expand their commodities business and is looking to hire like 50 people to their team.. same with bear stearns and BNP paribas. RBC is partnering with Sempra to trade commodities as well, so might want to check them out.

if you don't mind an environment that's more eat-what-you-kill, then check out louis dreyfus (diversified commodities), glencore (same), trafigura (oil mostly), vitol (again, mostly oil), etc etc-- these firms mostly deal with physical trading, but they do have derivatives desks as well. not sure if they're only hiring people experienced in the field or what, but i'm sure you can find out after making a few calls... same with oil/power companies like statoil, shell, exxon, etc.. while they have a derivatives presence, most of what they do is physical trading so they might only be hiring experienced traders in the derivatives space.. also, another problem with these firms is that if you're totally new, then you're expected to work on the back and middle office first before moving on to the front.. some of these companies (glencore especially.. just google them) are incredibly secretive and notoriously shady, but no doubt that if you are good, then you can learn a lot and make a lot (glencore made 5.6 billion in profit last year and only has 2000 employees... you do the math)

but with companies like glencore and louis dreyfus, they're definitely a better place if you want to trade a "newer" energy product, like liquified natural gas, petrochems , biofuels, emissions, etc..

Jul 25, 2013 - 6:03pm

wow thanks that's very helpful!

where do you think is the best location to start out in for energy derivatives? nymex/merc in the US? or london?

you seem like you know a lot about emerging products, do you have a view on emissions markets (carbon, sulfur, other greenhouses)? is it all hype for the most part?

Jul 25, 2013 - 6:05pm

Globally, the top 3 are J. Aron (Goldman), Morgan Stanley, and Barclays Capital. In the US all 3 are located in New York (MS is actually outside the city, but you get the idea).

The rest of the banks are all well behind the big 3, but that said, they are all also planning to grow dramatically. But their offices are mostly in Houston (ML, 1/2 of Deutsche, Citi, etc.).

Jul 25, 2013 - 6:07pm

how are the traders that work for energy companies viewed? do they have any opportunity to switch to wall street?

through connections I can possibly land an internship this summer with a trading subsidiary of a large coal company, but i'm not sure if this would even be beneficial...

Jul 25, 2013 - 6:08pm

If you prop trade and make a lot of money, a bank does not care what your background. Many naty gas/power traders worked for straight energy companies and switched to banks.

Jul 25, 2013 - 6:09pm

Which banks are top in commodities trading? (Originally Posted: 01/16/2013)

I'm interested in getting into investment banks commodity trading desks, and trying to work out which to apply to. I read a while back that Morgan Stanley, Goldman and Barcap are big in commodities - is this true? I'm most interested in ags/soft commodities - any info on top players in these? Any sites that can help me? Thanks!

Alright Geezer
Jul 25, 2013 - 6:10pm

Depends which ags/soft product you want to get into. Most specialize in one type of commodity (Grains, coffee, orate juice, etc) You're best to look for these firms in Chicago

Jul 25, 2013 - 6:11pm

Sejara, stop posting crap you don't have a clue about.

Banks are bit players in ags right now, it's a very difficult business unless you own a good deal of the supply chain. Most of the jobs are at the ABCD and NOW firms and some of the big oil/metals traders have been building grain desks. Some softs' markets are still dominated by specialized players, particularly coffee and cocoa.

Jul 25, 2013 - 6:17pm

Most Profitable Commodities desks (Originally Posted: 09/03/2009)

Hi all! Now that we're on the verge of recruiting again, I was wondering if (objectively or not) someone could give me a list of the best and/or most profitable commodities trading desks (2008/2009)? Which banks are better than others regarding commodities and which have some bigger key names?

Thanks tons, and I realize the advice will differ based on public opinion.
:)

May 5, 2012 - 10:25am
SamuelClemens:
What do you guys think of physical vs paper trading?

From what I've heard, physical seems to be the more desirable role, but that's just what I've read on sites like this one.

So, your point is working at Vitol or Glencore is better experience for entering commod HF/CTA?

Jul 25, 2013 - 6:22pm

The best and/or most profitable commodities?

I am a second year analyst in a nat gas trader program. In my opinion I would stick to crude, nat gas, power, or coal. Crude and gas both have liquid financial and physical markets. Also both products are volatile. Power is not as liquid but also volatile. Senior people in my office have worked in cotton and other agricultural products. The markets are not as liquid or as big. Stick to energy. I know nothing about precious metals.

Jul 25, 2013 - 6:23pm

Like others have said, in the commodities space it's MS and GS at the top, with BARCAP not too far behind. JPM is trying to beef up their commod operations, but they are still on the outside looking in at the present time.

In terms of desks within commodities, in my very limited experience, Oil Liquids, Credit, Nat. Gas and Electricity are the main profit drivers (pretty much in that order, too).

Jul 25, 2013 - 6:25pm
Shake:
Like others have said, in the commodities space it's MS and GS at the top, with BARCAP not too far behind. JPM is trying to beef up their commod operations, but they are still on the outside looking in at the present time.

In terms of desks within commodities, in my very limited experience, Oil Liquids, Credit, Nat. Gas and Electricity are the main profit drivers (pretty much in that order, too).

what are oil liquids?

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