'Liquoring up the goat' in Chicago

Dave Lehman, CME Group research and new product director, talks with farmers at CBOT

A group of about 30 farmers held a get-together in Chicago this week, the third such gathering of Agriculture Online Marketing Talk discussion group members. The farmers called their first social media meet-up two years ago in Des Moines, and held another one there last fall. This was the first trip to Chicago, and featured a visit to the Chicago Board of Trade.

Mike McGinnis, Ag Online’s Chicago bureau chief, organized a floor tour, speakers, and a round table discussion at the commodity exchange.

Most of the farmers had never been to the CBOT, and had been eagerly looking forward to the floor tour in particular. Some brought their spouses, and made the trip a mini-vacation.

Despite the monumental presence of the famous trading floor--the largest financial room in the world--some 80 or 90 percent of futures trading is done electronically these days. You can trade at home, at your office, or even while on vacation. A big question then is whether there will continue to be a bricks-and-mortar exchange where trading is conducted with the traditional open outcry method. The short answer is “yes.” For now.

Some of the farmers commented that the floor wasn’t as noisy as they expected. While a fair number of traders were using small computers in the pits, many were still scratching numbers on cards with a pencil. Parts of the floor did seem relatively quiet, with people staring into computer screens around the edges, rather than shouting orders across a pit. Action in some areas, like the S&P and soybean options pits, seems loud and intense, however.

If there is sometimes a fair amount distrust among farmers toward commodity traders, it wasn’t much in evidence on Monday.

“I even got a new perspective on traders, they have a job to do, and that is important to us farmers,” said an Indiana farmer.

And, basically we were treated like royalty. The CME Group, which now owns the CBOT, allowed us to tour the floor right after the opening bell. They gave us enough time to poke around in groups of ten and get a feel for how trading is done these days. We were afforded use of their boardroom, cafeteria, and afterwards a trader’s club nearby.

While I don’t think farmers and traders will ever quite live on the same planet, it was interesting to see commonalities between the two professions.

Farmers and traders both work in high-pressure, risk-taking environments. They both appear to love their work. Traders seem to have a deep respect for the farming life, and many of them in fact come from the farm, and maintain farming interests.

Finally, there’s the mutual love of earthy language. One farmer wrote in the discussion group about the floor tour: "I heard one trader yelling to his buddy across the pit 'call home and tell them to liquor up the goat.' I think that is slang for 'I just made a bad trade.' "

Farmers know what it’s like to make a bad trade.