Sowing the Seeds of Data-Driven Success
We talked to Brad Knight, GeoCommodities Managing Director, about the past season. GeoCommodities is Victoria’s leading independent grower broker for grain marketing, providing full-service support to farmers, from sowing to selling their crops ultimately helping them convert grain into money.
How GeoCommodities leveraged Octopusbot Data Intelligence for Market Mastery
Last season, we had an excellent performance for GeoCommodities and our customers. However, despite the successful crop across Australia, we faced many challenges due to the uncertain conditions of the international markets driven by the war in Ukraine.
Our major challenge during the last year was separating market white noise from reality.
A usual problem for farmers is that they lack consistent information sources for market intelligence. They receive information from numerous sources such as television, newspapers, and information sessions from banks or grain marketers, and they put all this information in the same basket. The problem is that information is often specifically targeted at a certain audience, for example, a bank will talk about the market very differently than commerical radio and a grain trader.
"The challenge was separating market noise from reality to make better decisions for their clients".
During the last 12 months, grain markets have been on the mainstream media every day because of the Ukraine war, therefore our customers have been receiving market intelligence from commercial television, which is a problem that we had not had to deal with before because mainstream media does not typically care much about grain markets. As a result, we had to spend a lot of time and effort dispelling myths with so much information out there to make critical decisions about market view, what they’re selling and when, how, and what they do. We needed to separate all that white noise from reality.
Solution: Octopusbot Data Intelligence
"By using Octopusbot Data Intelligence, GeoCommodities made data-driven decisions and cut through market noise with factual information."
Octopusbot has been fantastic at cutting through the noise with factual data over the last few years, especially in the previous 12 months. We used their data, in particular, the deep dive analysis for global crop production, which has been fantastic and very timely because they have been targeted at key times like Argentina soybean and corn, and US winter wheat. The complicated and significant amounts of data that Octopusbot is collating into key production forecasts allowed us to then go and say to clients, “I know you’re hearing this, but based on this factual information, this is what that crop looks like,” so we can make data-driven decisions.
That definitely helped to dispel myths that the entire North NSW crop was gone. It was a very trying time for many farmers in Australia in September and October last year with a lot of wet weather and floodwaters. So the work Octopusbot did there to estimate the damage that floodwater had caused the crop was quite valuable too. We discuss with clients that there is some damage, but when you work it out on a total tonnage, it’s relatively insignificant against the crop size.
Big Wins: Aggressive on Canola
The one that really sticks in my mind is oilseeds. They came off a huge bull run last year in a global shortage of oilseeds into the back end of last year’s marketing season. We were pretty happy with Octopusbot’s intel for Canada and Europe canola, which are major competitors with Australian canola.
We were able to deliver good, timely intel to our clients about the crop sizes and the likelihood that Canada would come back to a realistic supply level, and that’s helped with canola strategy, particularly going into harvest.
"Canadian and European canola intel from Octopusbot helped GeoCommodities become early canola sellers, resulting in an added 30% profit returned to farmers".
If we look at it today for a mark to market against the current canola price versus the average sales prices of most of our clients, there’s a significant gain. The added profit returned to farmers was approximately 30%. We’ve done some reviews in the last couple of months with some clients around the strategies we’ve employed to tweak them for the year ahead.
Canola continues to come up as an excellent result, not just canola but all grains. The farmers are very happy with the Octopusbot intel we’ve had, as they’ve been able to execute sound strategies.
Farmer Reactions to Data-Driven Information
We use specific pieces of Octopusbot information to support a discussion, and the farmers will look at it, and the feedback is always, “Oh wow, you know, that makes a lot of sense to me” because a lot of farmers are very data-driven. Being data-driven and they like to live in reality, so they like that the forecasts are based on actual historical information, not just hearsay or feel. It’s actually what happened in the past, so that resonates well with farmers.
Conclusion
Octopusbot Data Intelligence has provided us with the necessary tools to make informed decisions in a challenging market. By utilizing their data and analysis, we have separated market noise from reality, making better decisions for our clients and achieving significant gains in the process.
With the continued support of Octopusbot, we are confident in our ability to navigate future challenges and help our clients thrive. In addition, by providing farmers with factual, data-driven information, we have been able to support their decision-making processes, leading to successful outcomes and satisfaction with our services.