The True History and Utility of Futures

If farmers want to move ahead of today's global grain trading environment, one of the first things to do is to better understand the history of where it all began.

The Chicago Board of Trade (CBOT) was launched way back in 1848 by a group of 25 Chicago businessmen. It stemmed from shortcomings in the system at the time of strictly cash market activity between farmers and buyers, where a glut of grain offered at harvest inevitably meant rock bottom prices.

At the time, grain buyers had no way of knowing what the price might be in the future, or if there would still even be any old crop grain offered for sale in the waning months of the year prior to the next harvest. There was already plenty of production risk in farming courtesy of Mother Nature.

Balancing Crop Marketing Risk with Reward

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