Commodities investment—a type of hedge fund investing that involves betting on the price of raw goods like crops and metals—is one of the most speculative forms of investment, and therefore one of the most risky. Investment in commodity futures can offer the potential for massive gains, but can also threaten huge losses in the event of unwise investment. The secret to success in commodity futures is the ability to accurately predict supply and demand for the products in question, and to make the correct guesses and act upon them before other investors make their own moves. The earlier and more accurate an investor’s predictions, the more likely he or she is to see significant returns.
In the current atmosphere of economic turmoil, investors are starting to lean towards commodities speculation as opposed to other forms of investment, seeing that consumers are stepping back from typical retail purchases like clothing, cars, and entertainment yet continuing to purchase more basic food and grocery items that result from agricultural production and mining. Although they can be difficult to predict, commodities are being seen as potentially more solid investments than usual.
Traditionally, investors make informed guesses about commodities investments and simply accept the substantial risk of loss involved as part of the futures game. However, one way these fund managers and private investors can enhance their knowledge of agricultural commodities is by leveraging satellite image analysis to help determine which crops will be grown when, in what quantities, and how successfully. This isn’t something that a layperson can do, despite the fact that satellite images of agricultural sites are publicly available. Even if someone has the prior knowledge of agricultural practices to accurately analyze a satellite image of a field, there are far too many images for a person to accurately analyze.
This is where process automation tools like CrowdANALYTIX’ DataX come into play. DataX is an AI automation tool that provides customizable context-aware auto-tagging of audio, video, image, and text-based documents, which can then lead to actionable insights based on data analysis. DataX has been leveraged to analyze soybean and corn crop imagery up to three months in advance of harvest, and to determine which of the two cycled crops is currently being planted and on how much land. Further analysis leads to algorithms that can predict crop output based on the number of pixels representing each crop versus the number of acres represented in the images.
Once the soybean and corn crop potential has been determined, this information can be used by investors to generate reliable knowledge and make smart investment decisions with much higher probabilities of good returns. Tools like DataX can significantly improve customer satisfaction for hedge fund managers, and financial success for individual independent investors.