Play the markets while GPS drives the tractor

How will the farmer of the future pass the time in his self-steering tractor?

Playing the commodity markets may be the answer, especially in the US, the most advanced country for autonomous farm machinery, and for commodity trading.

Traders can make big money, for example if they correctly predicted last week’s two-year high in wheat futures.

The price jumped overnight, after a report from the US Department of Agriculture downgrading the US spring wheat crop.

This followed drought in parts of the northern US plains, and crop damage elsewhere by wind and hail.

Heavy rain in Idaho damaged crops too.

Of course, nobody knows more about drought and wind and hail and crop-damaging weather than local farmers.

A farmer who sees that the weather is good for his crops, and who knows that his neighbours are planting increased acreages, can confidently sell his crop for a high futures price, before the rest of the market knows that conditions are set for a glut of grain, which will drag prices down.

Therefore, the farmer is in effect the ultimate insider trader in agricultural commodity markets.

And if that farmer is sitting in a GPS-guided tractor for hours, tending to his huge crop acreages across the plains, he has the free time to monitor weather trends, the latest US Department of Agriculture crop reports, and to use his own local knowledge, enabling him to successfully play the agricultural futures markets. With a good internet connection, in a tractor cab equipped with much the same screens as a Wall St trader can use, and social media networks on his phone, the farmer is well placed to gather the information needed for successful speculation on commodity futures, while supervising his self-steering tractor.

According to a recent Financial Times article, some of these farmers are “running mini-hedge funds out of their tractor cabs”.

Modern technology can put the farmer on a more equal footing with the international grain companies which rely on information flowing from global networks of warehouses and ports, meteorologists and agronomists, to set buying and selling prices at the optimum levels for their profits.