Merrill Lynch Pulls Plug on Commodities Business

Faced with shrinking margins and fleeing business, Merrill Lynch (MER Quote) is closing its commodities operations, two people familiar with its plans say.

The move, announced to employees this morning and to be disclosed to the public this afternoon, comes as securities firms aim for businesses in which operating margins are high. Large European banks such as ING Barings, ABN Amro and Societe Generale have come into the business, bringing competition to traditional players.

The people familiar with the plan say Merrill will maintain its energy and financial futures trading operations but exit other commodities businesses such as grain, soybeans, cattle and other hard commodities. ...