The Great Russian Grain Robbery of 1972 and the Birth of the Turtle Traders

In the summer of 1972, the Soviet Union pulled off one of the most audacious trades in the history of commodity markets. They bought almost a third of America’s wheat supply. And almost nobody noticed until it was too late.

Chapter 9 of Torsten Dennin’s “From Tulips to Bitcoins” tells this story. It is about Cold War secrecy, a global food crisis, and a 23-year-old trader in Chicago who turned the chaos into a fortune.

The Setup

The early 1970s were a messy time for the US economy. Nixon was pulling the country off the gold standard. The dollar was weakening. And American wheat was sitting around $1 per bushel, kept low by government subsidies.

That weak dollar had an interesting side effect. It made American products cheaper for foreign buyers. Exports started ticking up. Prices started creeping higher. But it was slow, and nobody was paying much attention.

Then 1972 happened.

Bad Weather Everywhere

Mother Nature decided to hit everybody at once. Poor growing conditions across the US, Canada, Australia, and the Soviet Union. Yields dropped everywhere.

The numbers were brutal. Compared to 1970-71 levels, wheat stocks fell 93% in Australia. 64% in Canada. 59% in the US. The global wheat supply was shrinking fast, but the full picture was not clear to most market participants yet.

The Robbery

Between July and August of 1972, Soviet buyers quietly purchased 12 million metric tons of American wheat. That was about 30% of total US wheat production. The deal was worth roughly $700 million.

They called it “The Great Russian Grain Robbery” because the Soviets managed to lock in purchases before the market fully understood what was happening. By the time traders and politicians figured out the scale of what the Soviets had done, the grain was already committed.

The price reaction was violent. Wheat went from below $2 per bushel in the early part of the decade to over $6 by February 1974. Tripled. Corn jumped from $1.50 to $4. Soybeans tripled too, hitting above $12 in June 1973.

American consumers felt it immediately. Food prices spiked. Politicians scrambled. The USDA got criticized for not seeing it coming. But for commodity traders in Chicago, this was the opportunity of a lifetime.

A Kid Named Richard Dennis

This is where the story gets interesting on a personal level.

Richard Dennis started working at the Chicago Mercantile Exchange when he was 17 years old, back in 1966. He studied economics, spending time at both the University of Chicago and Tulane. But he was not interested in academic theory. He wanted to trade.

He started speculating with $2,000 borrowed from his family. Two thousand dollars. That is it.

When the Soviet grain deal sent wheat prices soaring in 1972, Dennis was 23 years old. He bet on rising wheat. He was right. By 1973, his capital had grown to $100,000. In 1974, he made $500,000 in profit on soybeans alone. He was a millionaire at 25.

Think about that timeline. From $2,000 to over a million dollars in roughly three years. In his early twenties. Trading grain.

History Repeats

In 1977, the Soviets did it again. Their harvest came in below 200 million tons while the US was forecasting a strong crop. Soviet buyers went on another purchasing spree, buying 18 to 20 million metric tons from the US, Canada, Australia, and India.

Same playbook. Same result. Prices moved, and the people positioned for it made money.

Dennis was one of those people. By the early 1980s, his trading capital had reached $200 million. They gave him a nickname on the trading floor: the Prince of the Pit.

Breeding Traders Like Turtles

Here is the part of the Dennis story that became legendary far beyond commodity markets.

In 1983, Dennis had a bet with his partner William Eckhardt. Dennis believed that trading could be taught. Eckhardt believed it was innate talent. To settle the argument, Dennis recruited and trained 23 people from all kinds of backgrounds. He called them the Turtle Traders, reportedly saying he wanted to “breed traders like they breed turtles in a lab.”

He gave them his rules. He gave them capital. And over the next five years, the Turtle Traders earned him $175 million.

Dennis won the bet. Trading could be taught. But it started with the grain markets of the 1970s. Without the Soviet grain robbery sending prices through the roof, a 23-year-old kid with $2,000 might never have become the Prince of the Pit. And the Turtle Traders might never have existed.

What Stays With Me

This chapter connects a lot of threads. Geopolitics, weather, government subsidies, Cold War secrecy. All of these things crashed together to create a moment in commodity markets that changed careers and fortunes.

But the part I keep thinking about is the information gap. The Soviets knew their harvest was bad. American officials and traders did not fully grasp the scale of the shortage. That gap between who knows what and when they know it is where the real money gets made. It was true in 1972 and it is true today.

Dennin uses this chapter to show that commodity markets are not just about supply and demand on a spreadsheet. They are about weather, politics, secrecy, and timing. The people who understand all of those layers at once are the ones who profit.

Previous: Chapter 8: Soybean Scandal

Next: Chapter 10: Gold Standard

This is part of my From Tulips to Bitcoins book retelling series.