This afternoon the class visited the Buenos Aires Grain Exchange, which was founded on May 15th, 1854. We started the tour learning about the history of the grain exchange. In 1897, the first building that contained all of the tools needed was constructed. About 10 years later the exchange was moved to downtown Buenos Aires to its current location. May 15th, 2015 marked the 161st anniversary of the Buenos Aires Grain Exchange.
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A view of the "Pit" as it is called where the buyers of the futures and options place their bids and in the background the price board, which showed the Argentina crop prices, along with prices updated in near real time with Chicago, Kansas City, Winnipeg, and other major world markets.
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Students learning from a representative of the Board of Trade how the trading process occurs in Argentina.
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Students could hear the chatter of the selling and buying of the futures and options and although not a hectic pace trade was occurring while we were there.
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The class also had the opportunity to visit the trading floor where there were a few traders were present. The most common method of trading today is through the computer which became dominant about one year ago when a government bill was passed that allowed more electronic trading. The Buenos Aires Grain Exchange trades about one-third of Argentina´s total grain exports. They trade approximately 30 million metric tons yearly using contracts of 100 metric tons. This exchange also uses the Chicago Board of Trade as its main reference when determining price levels.
Recent changes in political power have made the Grain Exchange more volatile as the new president of Argentina has made significant changes to grain export taxes. The importance of this exchange in Argentina is very large as it represents more than 800 companies that participate in trading commodities. Many of these companies are from the U.S. making this visit more valuable.
Written by Dale McMullen & Jason Madison
