The Rats Are Deserting The Ship
Bumper crops, smarter farmers with grain bins and more public access to data has grain traders at the big firms (ADM, Bunge, Cargill, Dreyful) on the hot seat. There is a fair amount of shuffling going on, according to Bloomberg.
In a word, the grain traders are less profitable. I guess that's two words.
1. Bumper harvests reduce volatility, and traders need volatility.
2. Contango was working so traders could foresee a profit.
3. More people see more data so arbitrage is more difficult.
How does this affect producers? Here is my unsophisticated take - you tell me if I'm wrong.
1. Reduced volatility means watch input costs and lock in a floor price in a somewhat conservative way.
2. Sell the carry when there is one and sell the cash when there isn't - pay down debt.
3. Make data work for you because everyone else is using it. Don't bet against a world of information unless your contrary information is on a big enough scale that the market will react. (Don't expect prices to rise just because your corn field is yielding poorly.)