Tales from the Pit
Who shot the grain market?
By Peter Kelly
In January 1980 I was 26 years old and awaiting the birth of my first child in April. I was a broker-trader in the soybean oil pit at the Chicago Board of Trade and I was also trading corn for my own account. I was short corn on a particular Friday. I thought that the corn market was acting very heavy so I doubled up and sold more corn taking it into the weekend.
That evening we had dinner with another couple at their house and after dinner we were watching the TV show “Dallas” when President Jimmy Carter came on the television and announced that because of the Soviet invasion of Afghanistan we were going to embargo trade with them.
At the time the Soviets were our biggest customers of agricultural goods. When President Carter made his announcement I had to check with my friend to see if I had heard correctly. The commercial grain companies sued to keep the grain markets from opening on Monday, and when we finally opened on Wednesday, corn was down the limit. As a result I was able to replace my unreliable six-year-old car with a new reliable one. Then my son was born three months later.
Note: For more on 1980 grain embargo see “Russian grain embargo,” page 19.
Peter Kelly is a CBOT Class B shareholder and soybeal oil trader.