Shellady: It's not my father's grain market anymore
Scott Shellady, Viewpoint, Quad-City Times
Sep 12, 2021
It’s not my father’s grain market anymore
You see, my father got into this business in 1962. He was fresh out of Drake University and landed a job with Cargill. He didn’t know much about Cargill back then; it was just a pretty good job for a kid out of Muscatine, Iowa. It was at Cargill where he leaned the grain business. Cargill has a very good reputation for teaching new hires the ins and outs of agriculture — among other things. It is still one of the largest privately held companies in the world. If it were a public company, it would rank 15th in the Fortune 500. Their revenues for 2018 were $114 billion. Needless to say, it is a behemoth. Not as big in 1962, but it still had its street cred, if you get what I mean.
My father was lucky — he had a knack for the trading business and was promoted quickly. He was first stationed in Des Moines — where I was born, and then subsequently we were moved to Minnesota and finally Chicago. The mighty Chicago Board of Trade was where he would stay until his retirement, and it would also be my launching point into this unique line of work. Wearing a funny-colored jacket, in this case a black-and-white cow print, standing around in an octagon-shaped pit of 300 other loudly clad men, trying to trade the world’s grain — for a profit. I almost left out the hard part — for profit.
That was the early 1970s, and it was raw capitalism. There were no trading screens, the quote boards, where trades were recorded were staffed by men with chalk and erasers. It wasn’t your normal scene in "Trading Places" as there was a certain decorum, ties to the top of the neck and a modest sport coat were the norm. While at times the action was frantic, you could still smoke cigarettes in the trading pit during the session. There were big leather sofas for a quick break when the action was few and far between while some of the older gentlemen (there weren’t very many women back then) would gather for a quick card game in the canteen to keep their minds sharp in between droughts and floods.
My father relished this environment. It was like sports. No homework, when the final bell rang, that was the final score. You either lost money or made money, but it was done — tomorrow was another day. Same ball field but maybe a slightly different opponent. No two days were ever the same. When the markets were busy it usually meant there was some sort of calamity in the fields. Too much heat, not enough rain or Russia was buying all our crops — the action was thick and fast. This put my father in the frame of mind that he wanted to be a part of the business, from beginning to end. That is when we bought our farm — 50 years ago. He couldn’t get enough of it, and given half the chance, we always spent our vacations, days off or school breaks out on the farm — my brother, sister and I complaining all the way. We learned some valuable lessons up there all these years. The value of a dollar, where food comes from and the effort it takes to get it on to your table. I will be forever indebted. But the real reason I bring it up is that in the hectic world of trading and finance, if my father were to be alive today, he wouldn’t recognize a thing.
Some would say we have lost our way. I can understand that point of view. There is a tremendous amount of speculative money in our markets today, and they are all aided by the advent of technology.
You have heard the words, high frequency traders, algorithms and black box execution. They are all relatively new to this business where we used to believe we set the price of food (we still do), but we are now in the business of facilitating this new wave of technological trading where it is more important to have machines than men...