Picking the right Ag Trading Role: early career

Hi All!

I made a throwaway to post this but was looking for some insight into thoughts on 2 offers I have

1) Jr trader for 12-18 months in a European location with a plan to move back to the US to work in a small office here and help transition as one of the US principal's retires. The firm is 1 product only (cotton).
Pro: very established firm, smaller than ABCD, well known in the market.
Con: cotton seems to be lacking vol, unstructured program, moving to Europe (not a con but major hassle), lack of color on compensation once back in the US.

2) The training program at non-ABCD ag shop in the US (Andersons, Scoular, Gavilon). Well established program, rotate through a few desks.
Pro: chance to see a number of products, eat what you kill mentality, strong comp and responsibilities early. "go commercial" quickly
Con: will remain domestic only, low comp during the training program, limited exposure to derivatives. The firm went through a recent merger that could change its culture (hint hint).

I see strong pros and cons to both. I like the intl experience but worry about working at a very small US office after the European stint is over in option 1. I fear being limited to being a domestic only guy with option 2.

Any thoughts guys?

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (12)

Nov 18, 2019 - 7:56pm

Honestly I'd go with option one. Being niche isn't necessarily a bad thing in physical commodities and companies like Lansing/The Anderson's will always be hiring good traders. If the cotton gig works out great and if it doesn't you can move into feed through experience with cotton seed (Probably would have to step down but can step back up pretty quickly once you're up to speed).

Array
Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
Most Helpful
Nov 20, 2019 - 3:11am

How big is the trading team for the 1st option?

If it's small but profitable I myself would choose number 1. International exposure is good to have and great conversational starter - and working in Europe for 12-18 months sounds good to me.

I wouldn't worry too much on compensation. You have your life ahead of you and just do what the business asks of you, and you will get compensated for it. If you don't then by all rights you should move elsewhere. It sounds like you could potentially run the desk in the US once the principal retires? It also sounds like you might have opportunity for international trading (from the Europe training) and not just domestic focus.

Nov 20, 2019 - 7:19am

In the US its 2 principals and 2 back office. Moving about 250k bales a year. Margins seem particularly tight from speaking with the guys. Think 5-8 usd per bale. Seems like there just isnt much $ to go around.

2 support and 1 principal are over the age of 60 and set to retire in 1-2 yrs. I guess the math really improves in my favor when you remove 3 people from the equation.

I do think the euro exposure is great, especially if I decided to go back to get an MBA in a few years as well. Seems like that really boosts the application

At the same time with option 2, its a well established shop known to pay well and help grow young guys across multiple desks but I would likely not being seeing anything outside of the midwest usa

Nov 20, 2019 - 8:38am

Thanks for the background.

Margins are generally tight across the board for most commodities. But I would suggest perhaps looking at volume demand of US market per annum, and work out the market share of company from option 1.

If margins can't be improved then can you increase volume? Does a profit margin between $5-8 per bale against 1-2 million bales sound probable?

I am thinking this way because 75% of US office is ready to retire and that makes me question if they've been riding in the back seat and playing safe. If so, then can someone young and hungry be able to secure bigger volumes in the market.

Nov 20, 2019 - 9:19am

Sit ea maiores consequatur sunt. Esse est magni hic maxime. Nisi excepturi libero qui. Aut possimus nulla ut eos. Sequi magnam odio quia. Non et impedit eligendi et ut.

Exercitationem numquam quibusdam et modi delectus vel doloribus. Molestiae illum aut reprehenderit enim accusamus. Qui molestiae ut eum provident quis. Autem iure quo dicta ea. Eaque est natus quia culpa commodi minus. Voluptatem maiores voluptatem commodi error iste.

Start Discussion

Total Avg Compensation

October 2021 Investment Banking

  • Director/MD (10) $853
  • Vice President (39) $363
  • Associates (229) $233
  • 2nd Year Analyst (139) $155
  • 3rd+ Year Analyst (32) $149
  • Intern/Summer Associate (105) $142
  • 1st Year Analyst (504) $135
  • Intern/Summer Analyst (387) $83