This text is a must-have resource for accessing the information required to trade successfully in the agricultural marketplace.
Physical and Financial Agricultural Markets
'You should buy land, they don't make it anymore.'
1.1 Agriculture and the Beginning of Human Sedentarization
Commodities have been produced and exchanged throughout history and trade is an integral part of human civilization. In fact, one can argue that the rise of the latter has its origin in organized commodity production and distribution. As nomadic men settled on land to cultivate crops and graze their cattle, an agriculture-based economy came to existence, while some became carpenters, ironsmiths, goldsmiths, and shipbuilders. Goods were provided by the producers of diverse crops and livestock products in exchange for services. Farmers would bring their excess crops to a central location where they were carefully weighed - interestingly, the existence of weights can be traced back to several millennia before our era. The crops were then stored in a public building, which was the first form of a warehouse.
It was the emergence of barter and soon-emerged bazaars and markets that today still defines the centers of towns and villages. Trading merchants and artisans were organized into 'guilds' as early as the fourth century CE. From the first century CE, gold coins, wine, wheat, and linen were traveling east from the Roman Empire; ivory, silk, and precious stones were sent from India. As civilizations spread over the world, vessels started carrying goods, spices, and silks across the oceans. Indian literature from the beginning of our era mentions the existence in Southern India of separate markets for different commodities, such as grains, spices, cloth, and jewelry, located in particular in towns along the coast. Guilds and merchant groups were formed to represent the population.
The name of these merchant guilds in the northern part of Europe was the 'Hanseatic League,' which was part of Bruges in Belgium. Bruges was the main commercial city in the world during the 13th century, at the intersection of many trade roads, with wool coming from Scotland to feed the weaving industry in the city. In 1277, the first merchant fleet came to Bruges from the Italian port of Genoa, linking the city trade to the Mediterranean sea. This opened Bruges to the trade of spices and also to large capital flows brought by foreign merchants. The 'Bourse' opened in 1309 and is considered to be the first stock exchange in the world, showing that financial trading followed the trading of raw materials, and not the other way around. Even though Bruges fell behind Antwerp after 1500 as the economic capital of the region, Zeebrugge - the port of Bruges today - is an important location since the underwater natural gas interconnector from Bacton in the UK ends in Europe, and Zeebrugge is, at the time of writing, the main natural gas index in continental Western Europe.
Similarly, global trading and financial centers such as London, New York, Rotterdam, and Hong Kong owe their position in the present world economic map to their age-old trading culture. With the creation of the World Trade Organization (WTO) in the mid-1990s, commodity markets have experienced a new dramatic growth, both in physical goods and through derivatives platforms. Many types of different players came along to offer financial products infinitely more complex than the simple Futures contracts traded on the Chicago Board of Trade since 1848.
Looking back at the last two centuries, the world has witnessed a dramatic increase in wealth and prosperity in both the developed and developing countries. Poverty has reduced significantly not only in the developing countries of Asia and South America, but also in Africa. Shipping has continued to play its crucial role, while modern multi-purpose warehouses and elevators came to existence together with the advent of sophisticated commodity securitization. Looking back at the last 50 ye