OI20: Why Commodities Refuse to Trend Forever ft. Doug King

Dec 24, 2025

Doug King, an experienced commodities trader and hedge fund manager, shares insights from his extensive career at Cargill and his own Mergent Commodity Fund. He discusses why commodities resist long-term trends, emphasizing that innovation curbs scarcity narratives. Doug highlights how physical market knowledge is crucial for successful trades and reflects on significant positions in oil and nickel. He stresses the importance of risk control, the need for patience, and staying aware of market distortions to capitalize on sudden opportunities.

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INSIGHT

Cash Markets Trump Futures Signals

Deep cash‑market work and physical knowledge create conviction that futures prices alone cannot.
Doug King says many market participants have never seen the underlying commodity, so cash signals matter more.

INSIGHT

Commodities Cycle Because Innovation Wins

Commodities are inherently cyclical because innovation and substitution repeatedly break scarcity narratives.
Doug King highlights electrification as the rare long-term theme less easily solved by supply-side innovation.

ADVICE

Wait For Clear Supply–Demand Distortions

Wait patiently and only deploy risk when a clear supply-demand distortion exists.
Avoid second-guessing rocket‑ship moments because you'll often arrive late and miss the big gains.

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Moritz Siebert speaks with Doug King about what it really means to trade commodities through cycles, distortions, and stress. Drawing on decades at Cargill and more than twenty years running a commodities hedge fund, Doug explains why innovation keeps scarcity narratives in check, why commodities resist buy and hold logic, and how real edge comes from cash markets rather than futures screens. He reflects on defining trades in oil, nickel, and agriculture, the limits of volatility targeting, and the discipline required to survive violent squeezes. The result is a grounded account of conviction, risk control, and why commodities reward patience more than prediction.

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Episode TimeStamps:

00:00 - Opening remarks and introduction to Top Traders Unplugged

01:24 - Introducing Doug King and his background

04:49 - From Cargill to hedge funds and the pull of commodities

07:05 - Why the fund is purely discretionary and fundamentals driven

09:50 - Team size, selectivity, and waiting for the right trades

10:45 - Why commodities are cyclical and innovation breaks scarcity

13:46 - Electrification and where long term excitement may lie

15:37 - Defining edge in commodities trading

18:12 - Physical delivery, convergence, and real market signals

20:23 - Concentration, themes, and risk limits

22:34 - Risk budgets, drawdowns, and volatility control

26:35 - Margin stress, squeezes, and market dysfunction

30:43 - Defining trades in oil and nickel

35:54 - Linking physical trading to hedge fund insight

43:00 - Discipline, noise, and surviving as a commodity trader

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