Former Cargill Global Trading & Risk Management Director Kristine Engman Hochbaum explains how commodities trading strategies and quant trading strategies really work. On Odds on Open, she breaks down the sources of trading edge and alpha generation in today’s commodities markets, from agriculture trading to energy and metals.We cover why physical vs. financial commodities trade differently, how systematic trading and traditional players (hedge funds vs. ABCDs) approach markets, and the lessons of the 2022 commodities boom. With Ethan, Kristine unpacks real-world risk management strategies around delta, liquidity, forecast accuracy, and headline shocks — from Russia–Ukraine war trading impact to weather, inflation, and supply chain disruptions.Key topics in this episode:- How relationships and brokers create trading edge in commodities- Why capital allocation matters for building positions- Headline risk and the impact of social media on commodity prices- Managing liquidity risk and delta in physical books- Weather risk and forecast accuracy in agriculture and energy trading- The role of supply chain disruptions in commodities markets- Differences in hedge fund vs. ABCD trading strategies- Lessons from the Russia–Ukraine war trading impact and inflation and commodities- Stories from real trades: negative power prices and long oil during crisis- Career lessons: what makes a great trader and how to keep learning commodities marketsAlong the way, she shares what separates good traders from great ones, why inflation and commodities are inseparable, and how to keep learning in fast-changing markets. If you’ve ever wondered what makes a great trader or how to start learning commodities markets, this episode is for you.00:00 Intro01:15 Edge in commodities trading? Relationships, capital, information04:40 Commodities market efficiency, information flows, and AI08:32 Hedge funds vs. ABCDs, commodity trading strategies13:34 When commodities outperform equities, the 2022 boom17:45 Headline risk, social media impact on markets19:08 Risk management strategies in physical commodities trading26:14 Probability, forecasting, and scenarios for trading decisions31:00 What makes a great commodities trader today37:53 Contrarian trading strategies, alpha generation in commodities42:24 Russia–Ukraine war impact on commodity markets, trading45:35 Life and career lessons from commodities trading51:30 Careers, uncertainty, and learning in commodities markets
