Eugene Kunda is the visiting assistant director and research associate with the Office for Futures and Options Research (OFOR) in the department of Agricultural and Consumer Economics at the University of Illinois – a Land Grant University. As part of his work, he coordinates the daily operations of OFOR. On Apr. 20 to 21, he taught an Ag Markets Workshop at the Illini Center in downtown Chicago along with agriculture market consultant Sue Goll. The workshop aimed to provide an in-depth update on the latest trends in the world agricultural marketplace, grain flow, transportation, regulation, hedging, basis trading, spreads, markets reports and options. Kunda is currently in the process of making contract recommendations for CME Group and is developing industry software.
Prior to joining the University of Illinois faculty, Kunda worked at John Deere Agri Services in marketing development. Kunda is a former senior economist at the Chicago Board of Trade (CBOT). He talked recently with JLN’s Christine Marie Nielsen and shared some thoughts about the industry and his career.
Q: What did you hope to accomplish at the workshop? What was the impetus to create it?
A: We noticed that it’s been several years since this has been done. Sue Goll has really taken the primary initiative to presenting. She had been presenting workshops like this in the past for the Chicago Board of Trade. I was an employee at the CBOT years back and had done similar workshops for the CBOT not only in the U.S., but also worldwide. I’ve also led workshops for the university.
Q: What do you think about the evolution of the Chicago exchanges since you worked in the Loop?
A: There’s been a tremendous increase in volume with the advent of electronic markets. The OFOR has been largely connected to (CME Group). It’s been supported by Leo Melamed, even prior to the merger. Grants have been provided to study markets. Also, The Clearing Corporation Foundation established and endowed a Chair at the U of I.
Kunda is referring to a $2 million grant from the Clearing Corporation Charitable Foundation that established the Clearing Corporation Foundation Endowed Chair in Derivatives Trading in the Department of Agricultural and Consumer Economics. Both Clearing Corporation general counsel, Kevin McClear and longtime board member Ron Filler, a 1970 graduate of the school, played a big part in the foundation’s effort to establish the Chair.
Q: What is the main academic information that you teach your students?
A: There are several courses. I teach futures and options. We have students who eventually take positions in merchandising, such as grain elevators, grain buyers, processors such as ADM, Bunge, CGB, The Scoular Company, Farm Credit Services, JP Morgan Chase, and Monsanto. We have some students who go into just trading. Some have gone into journalism. They became agricultural journalists with the Farm Bureau for example.
There are things happening, like precision agriculture – the “precision” part comes from the part you can now optimize your resources. You are optimizing the resources. If you had an acre of land and knew that certain spots needed more fertilizer, you could supply selectively. The use of this is both in highly productive land and marginally productive land.
Q: What is one of the main concepts that you try to impart in your students?
A: You need a plan. You don’t necessarily have to meet the plan but you need a plan to guide your decision. In a career, you need to have the team of counselors, marketing, financial and legal specialists.
Q: Have you been at all surprised by your students along the way?
A: I’m in awe of that intensity and drive, the motivation to be productive and truthful contributors. It’s always amazing. I’ve learned a lot from the relationship with…the next generation. It’s been very rewarding.
Q: What is the most important thing you accomplished while working at the Board of Trade ?
A: My job was to maintain the performance and effectiveness of ag contracts. I was able to have a hand in creating the Illinois Waterway Delivery System (IWDS). The delivery system utilizes shipping certificates that allow the long to demand load-out of grain under specified conditions. The new system represented a significantly larger potential supply of corn and soybeans for delivery, and increases the number of companies that were eligible to deliver grain.
I also created 18 new agricultural futures contracts. I’ve done work on evaluating current performance of contracts and looked at convergence as it relates to futures – the coming together of futures and cash prices (Poor Convergence Performance of CBOT Corn, Soybean and Wheat Futures Contracts: Causes and Solutions by Scott H. Irwin, Philip Garcia, Darrel L. Good, and Eugene L. Kunda). I met with the CFTC and have done some presenting on that front (CFTC Seeks Nominations to the Subcommittee on Convergence).
Q: What is something about you that would surprise your acquaintances in the financial industry and academic world?
A: I’m taking my wife to Spain this summer. We met at the University of Illinois. We’ve been married 26 years.
Q: Anything else?
A: I would like people to know that the workshops are also available through the office on a specific industry or company basis. It’s a kickoff to a much broader outreach service. Our primary mission is the teaching and research on futures markets.
Q: Do you tweet? If so, what’s your handle?
A: I don’t tweet. Should I?