COVERING SECTORS FROM BEEF, PORK, AND POULTRY TO GRAIN, CORN, AND COTTON
Ag Today
The Invesco DB Agriculture (Fund) seeks to track changes, whether positive or negative, in the level of the DBIQ Diversified Agriculture Index Excess Return™ (DBIQ Diversified Agriculture Index ER or Index) plus the interest income from the Fund's holdings of primarily US Treasury securities and money market income less the Fund's expenses. This Chart shows the nature of the agriculture industry through main ag commodities.
ABOUT THE PANHANDLE AGRO-ECONOMIC REVIEW
Panhandle Agro-Economic Review is a weekly economic report that focuses on providing agricultural producers with up-to-date information on changes in commodities markets.
Our goal is to empower producers with the tools and insights they need to make informed financial decisions in their businesses. We cover a wide range of sectors, from beef, poultry, and pork to cotton, corn, and grain. Stay tuned for regular updates on the latest trends and developments in the agricultural finance world.
Abstract:
Corn and beef are two of the most important agricultural commodities in the nation and the world. Because of their importance, it is of high interest to many agriculturists to research and discover just how different events can impact them. Politics have long had a major effect on agriculture, and in recent years this effect has just been exacerbated. To understand exactly how these three things, corn, beef, and legislation, interact, we used corn futures (ZC1) and live cattle futures (LCc1) in conjunction with specific policies to understand exactly how legislation affects these futures. After deciding what futures to use, it was hypothesized that corn would change by $25 between the first and last day and beef would change by $5. Data was collected by recording the price of corn and beef futures for the 5 days leading up to the passing date, the day it was passed, and the 5 days following the bill's passing. In total, we collected 22 prices per policy and 198 future prices. This amount of data has helped us discover the specific correlation between futures and legislation, this correlation being that corn futures average a change of 28 dollars from the first day recorded to the last day; beef averaged a shift of 4 dollars. Although this amount of money may seem almost insignificant, for a small cattle operation, 4 dollars on 100 head can be the difference between breaking even or making 400 extra dollars. In the end, the hypothesis was proven wrong, but it was very close to what the result ended up being.
