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Summary & Output

This sample Gro API script creates a basic price valuation model for corn and soybeans during the growing season using the US stocks-to-use ratio. The model calculates a ”fair value” price estimate based on the historical relationship between the stocks-to-use ratio and prices. A stocks-to-use ratio is a normalized inventory measurement, and, therefore, is a helpful tool for analysis over different time periods and of different crops.
This model generates scatterplots for each modeled crop, and also saves the output to a PDF in the current working directory.
Accessibility: The code for Gro’s framework is functional exclusively with the Gro API Client

Inputs

This framework uses a limited number of data series covering price, supply, and demand to produce valuable output. Each input source is profiled below.
CME

Model Specific Data: Settlement futures prices for corn and soybeans.

PS&D

Model Specific Data: Annual United States “Stocks, Ending Quantity”, “Domestic Consumption”, and “Export Volume” of corn and soybeans.

Methodology

Gro: Stocks to Use vs Price Model Methodology
  • Generate rolling futures price series and calculate average settlement price for each month
  • Calculate the projected stocks-to-use ratio as reported in each monthly PS&D release. Ending Stocks/(Domestic Consumption + Exports)
  • Run linear regression on price and stocks-to-use values, and generate scatterplots

Notebook

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