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February 5, 2024
The past two months have been hard on grain prices. The trend is down–corn and soybeans prices are back to levels last seen at the end of 2020. I’m in no mood to chase these markets lower, either for old crop grain in storage or 2024 new crop. What should we do as we wait for something to start a rally in grain prices? There is no better way to pass the time than to read a good book. Allow me to make a few recommendations.
Back to the Futures: Crashing Dirt Bikes, Chasing Cows, and Unraveling the Mystery of Commodity Futures Markets (Scott Irwin and Doug Peterson, August 2023): Scott Irwin is a Professor at the University of Illinois. I enjoyed the way that he and Mr. Peterson weave together stories of risk with the use and function of the futures market. This book speaks to major futures-related controversies of the past two decades, including the anti-speculation cycle and cash-futures convergence issues in grain markets. It also revisits great thinkers like Roger Gray and Holbrook Working. How much did I like this book? It’s now a required reading for my Futures and Options course at the University of Minnesota.
Limit Up (Russ Crawford, January 2022): As an active follower of grain markets, you’ve read many references to the “Great Grain Robbery” of 1972. Until I read this book, I never had a clear sense of notorious event, when the Russians secretly negotiated the largest deal in commodity trading history. Mr. Crawford is a retired Cargill trader and in this work of historical fiction, he describes the main characters (some he knew from his time at Cargill) and explains how the events unfolded.
I have two recommendations from the same author. Jonathan Kingsman is another retired Cargill trader who has written The New Merchants of Grain: Out of the Shadows (November 2019) and Commodity Crops & and the Merchants Who Trade Them (with Jacobs Wouter, December 2021). The first book is a fresh look at the biggest commodity trading firms in the world. The second book looks at the history of nine commodity crops and includes interviews with top traders.
The Man Who Fed the World: Nobel Peace Prize Laureate Norman Borlaug and His Battle to End World Hunger (Leon Hesser, August 2006): Everyone should know the story of Norman Borlaug–the father of the Green Revolution–whose groundbreaking work in agriculture probably saved more lives than anyone else in the twentieth century. Borlaug brought three innovations that led to the wheat revolution in Mexico and the Green Revolution in Asia; (1) high volume cross-breeding to identify rust-resistant varieties, (2) shuttle breeding, or breeding two generations a year that cut in half the time needed for results and, (3) the development of short-straw wheat suitable to machine harvesting but less apt to lodge.
The Children's Blizzard (David Laskin, October 2005): Our forefathers did not have an easy life converting the prairie to farmland in the Dakotas, Minnesota and Nebraska. A disastrous blizzard in 1888 killed hundreds of people, including over 200 children who never made it home from their one-room schoolhouses. This terrible event led to a serious effort to improve forecasting and communications at the National Weather Service.
Grain Marketing is Simple (3rd Edition, Edward Usset, October 2023): A few weeks ago, an Iowa producer shared a story that I took as a complement. He posed a question to a contact at one of the largest ag marketing advisory services in the country. “My son wants to learn more about grain marketing. Can you recommend a book that addresses the topic well.” His contact texted him a photo of my book and noted that at his firm, the new hires are asked to read it.
A quick search of the internet indicates that the average American reads about 12 books per year. This list should keep you busy for 6 months, at which time (I hope) the grain markets have regained their footing.
Marketing specialist, University of Minnesota Center for Farm Financial Management
Ed Usset is a marketing specialist at the University of Minnesota Center for Farm Financial Management. he authored "Grain Marketing is Simple (It's Just Not Easy)"; helped develop "Winning the Game" grain marketing workshops; and leads Commodity Challenge, an online trading game. He also blogs about grain marketing at Ed's World.
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