High Tech Agriculture Futures

How would you like to know the earnings numbers for some stock before the market release? Sure, it would be illegal, requiring inside information, but you could definitely make a lot of money if the market was making a poor prediction. I guess that's why analysts get paid so well; they estimate corporate earnings which can be very profitable for their clients if they don't screw it up (as we've noticed they often do). But what if you could really and legally know the numbers?

That's exactly what Lanworth does for the US agriculture market. They look down on crops via satellite (from earth orbit) to estimate harvest yields for their clients ahead of the traditional, and frequently revised USDA report. And as we noticed Friday, the USDA report has a substantial effect on commodity prices. After the report Friday morning, Corn opened limit up and closed there. Other agricultural futures made similar moves higher. Their clients are primarily hedge funds, farmers and buyers who want an "alternative analysis to complement the USDA's Crop Production Report." Check out yesterday's release from a representative of Lanworth, which discusses the USDA numbers as compared to their own satellite-based analysis.

If I were a big time grain futures trader I would certainly love to have this info ahead of the market. I would just hope that they are better at predicting the harvest than a Wall Street analyst is at predicting losses at their own banks. Lanworth doesn't typically pre-release (before the USDA) their numbers to anyone but their clients, so it's tough to gauge, but I would guess they are pretty accurate. After all, they are directly looking at what they are estimating, and it sounds like Lanworth has a good handle on the weather. Being able to estimate frost events would be mighty, mighty useful for a corn trader, especially this year as pointed out in yesterday's report. I think this technology is pretty cool.