Who trades commodities: the ABCDs and the majors

Published 2026-09-05; updated 2026-09-05.

A commodity trading house is a firm that buys physical raw materials from producers and sells them to processors, moving them across distance, time and grade in between, and financing them for the weeks or months the journey takes. The best-known agricultural firms are nicknamed the ABCDs, after Archer-Daniels-Midland, Bunge, Cargill and Louis Dreyfus Company. In energy and metals the equivalent list is Glencore, Trafigura, Vitol, Mercuria and Gunvor. What all of them sell is not a view on prices; it is a service that turns a crop or a cargo into something a factory can use on a stated day.

How does a trading house earn its margin?

Four transformations pay the bills. The first is place: buying where a commodity is abundant and selling where it is scarce, which means owning or chartering the freight and knowing which destination pays the largest differential over the benchmark this week. The second is time: buying at harvest when everyone sells at once, storing, and delivering through the year. The third is form: blending parcels to hit a contract specification, cleaning and drying grain, or refining and processing. The fourth is credit: paying the farmer or the national oil company now and being paid by the buyer later, which turns the trade into a financing business with a working capital requirement that runs to billions.

Against all four, the house normally removes flat price risk by hedging with futures. It sells futures when it buys the physical crop and buys them back when it sells, so a fall in the world price costs it nothing on the round trip. What remains is basis risk and execution risk: the local price may move differently from the benchmark, the vessel may be late, the buyer may reject the cargo on quality. This is why a trader is not a speculator, and why the margin is quoted in dollars per tonne rather than as a percentage return on a price view. When a price difference between two places or two dates is larger than the cost of closing it, taking it is arbitrage, and competition between houses is what keeps those gaps close to the cost of freight, storage and finance.

The four transformations a trading house is paid for, with the two obligations that run the length of every cargo.

Which firms are they?

Among the listed companies, Archer-Daniels-Midland dates its business to a linseed crushing operation started in 1902 and describes itself today as a human and animal nutrition and agricultural origination and processing company; its shares trade on the New York Stock Exchange under ADM from a business address in Chicago, Illinois (SEC EDGAR). Bunge Global has its corporate headquarters in St. Louis, Missouri and a registered office in Geneva, describes its business as grain origination, storage and distribution alongside oilseed processing and refining, and has been listed on the New York Stock Exchange under BG since 2001. Glencore was founded in 1974 in the marketing of metals, minerals and oil, is based in Baar, Switzerland, and combines industrial production assets with a marketing arm; its shares are listed in London under GLEN with a secondary Johannesburg listing under GLN (shareholder FAQs). In Asia, Wilmar International was founded in 1991, is headquartered in Singapore and listed on the Singapore Exchange, and runs an integrated agribusiness from oil palm cultivation through processing to branded products, while Olam Group is listed on the same exchange and owns the food ingredients business ofi, which became a separate entity in January 2020 and supplies cocoa, coffee, dairy, nuts and spices.

The private firms are structured differently. Cargill traces its origin to a grain warehouse in 1865 and describes itself as a family company operating across the food and agricultural supply chain. Trafigura says it is owned by its employees and trades oil and petroleum products, metals and minerals, and gas and power, alongside shipping, storage and blending assets. Gunvor is also employee-owned, following a management-led buy-out, and trades physical energy alongside terminals and refineries. Vitol traces its founding to Rotterdam in 1966 and trades crude oil and products, gas and LNG, power and metals; Mercuria was founded in Geneva in 2004 and combines energy and commodities trading with asset investments. COFCO International is the overseas agriculture platform of COFCO Corporation and handles grains, oilseeds, sugar, coffee and cotton.

A worked example

Scale explains the business model better than any description of it. In 2024, world exports of crude petroleum under HS 2709 were worth $1,324 billion and refined products under HS 2710 another $884 billion; wheat exports were $57.5 billion, coffee in all forms $50.6 billion and cocoa beans $18.9 billion (CEPII BACI). These are the flows the houses intermediate, and the margin they earn on each tonne is small enough that volume, not markup, is the point.

Take wheat. A standard Panamax cargo of about 60,000 tonnes, valued at the August 2026 US hard red winter Gulf export quote of $330 per tonne, is worth roughly $19.8 million (World Bank Pink Sheet). At that size, the $57.5 billion of world wheat exports in 2024 is the equivalent of about 2,900 such cargoes. The trader’s problem is matching origins to destinations: Russia supplied 15.8% of that export value in 2024, Canada 13.6%, the United States 11.7%, Australia 9.9% and Ukraine 8.3%, while Egypt took 9.0%, Indonesia 5.5% and China 5.0% (CEPII BACI). Every one of those pairings is a different freight cost, a different quality specification and a different currency.

Finance the same cargo and the reason for the industry’s structure becomes clear. Paying $19.8 million on loading and collecting it six weeks later ties up capital for the whole voyage, on a margin measured in single-digit dollars per tonne. That is why the sector consolidated into a small number of firms with bank lines, storage, chartering desks and hedging capacity, and why a change in interest rates or in the availability of trade finance reaches the physical market as fast as a change in the weather.

The flows behind these numbers are on the wheat origins page and the crude oil origins page, the price series are on the wheat price page, and the hedging mechanics are covered in how a futures contract settles and spot vs futures.

Cite as: Commodity Origins, "Who trades commodities: the ABCDs and the majors", https://commodityorigins.com/learn/who-trades-commodities/ (CC BY 4.0).