Commodity Market Transparency Through Data Exploration

The project will produce a product required by the food manufacturing and financial services industries to enable lower risk decision making, which will help secure lower futures prices when trading commodities.

It is widely recognised that commodity markets currently have a lack of transparency. One factor of this is the privately owned trading companies, who have escaped regulatory scrutiny and have been accused of market manipulation. Currently procurement professionals in food manufacturing, and traders in fund management, must use hedging strategies to reduce their exposure to market volatility and secure profitable returns. This project will develop a wheat market intelligence product that enables a clearer view of the wheat soft commodity market.

The research tasks and the wider project will explore datasets from wheat futures, the high volume of news reports and other data on wheat and real-world satellite data. The research work will enable early identification of 'market moving' effects in the wheat market from satellite data. The work will lead to product build and testing. The product will provide procurement professionals and traders using the product with a market transparency, enabling surety of raw material cost and greater returns.

The product is needed now to help address food security and to help commodity traders meet new legislation. There is a growth in higher risk, 'opaque' alternative asset classes, investing in frontier and emerging market agriculture projects. Finally, the increase and forecast growth in suitable satellite data enables a new product of this type.