Reports Disruptive Technologies in Commodity Trading

Disruptive Technologies in Commodity Trading Markets sentiment analysis and near real-time incident identi- fication. However, despite its potential value and the attention that social media has garnered over the last A ComTechAdvisory Report decade, relatively few respondents (only 39%) indi- cated that their businesses are currently interested in social media data mining (Figure 4). Machine Learning/Artificial Intelligence Machine Learning (ML) and Artificial Intelligence (AI) have significant potential to transform, via intelligent automation, the various business processes and op- erations in commodities; and the respondents rated this category quite highly as both an area of impact and investment over the next 12-24 months (Figures 1 & 2); and were viewed as having the second great- est chance of disrupting or having significant impact on business processes (Figure 5). As an example of the growing interest in data science and ML, Cargill 7 is reportedly building ML models for agriculture, food and commodities. As noted, Cargill sees ML as having application across a range of ar- eas – from optimization of shipping routes and satel- lite image analysis to examining crop yields, to even the interpretation of acoustic recordings of shrimp eating, informing shrimp farmers when to add more fish feed. ML and AI are viewed by most market observers as hand-in-hand solutions for addressing the vast amounts of data that the industry generates and can now access – providing a wealth of detailed informa- tion from production to consumption for almost all commodities for those that can access, analyze and act on it. Numerous other commodity-centric businesses are investing in AI and ML across a number of functional areas - including applications for automated and algo trading, optimized hedging programs for improved risk reduction and portfolio optimization, FX trading, and demand forecasting. For example, AI is being de- ployed by the National Grid in the UK in a program 7 https://www.ft.com/content/72bcbbb2-020d-11e8-9650-9c0ad2d7c5b5 © Commodity Technology Advisory LLC, 2018, All Rights Reserved. 15

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