Forget crazy stunts, use that streaming app to bet on corn

Streaming apps have taken China by storm with short videos of dancing teens, lipsyncing and all kinds of weird antics. now traders are using them to predict the future of grain prices.

For example, a farmer in the rural northeast is using his phone to film trucks lining up to load mounds of golden corn. Some 2,000 miles away in his Shenzhen office, Honda Wei watches attentively, scrutinizing the producer’s excited utterances and images of his fields for clues on supply and demand.

“it provides intuitive information about the domestic markets,” 33-year-old Wei said of his experience on the Kuaishou app, a shortform video platform backed by tech giant tencent Holdings Ltd. “traders are seeking correlations between farmers’ sentiment and futures price fluctuation.”

With more than 700 million users combined, Kuaishou and Bytedance Ltd.’s Douyin offer a vast potential source of intelligence in an opaque Chinese market where government data isn’t always the most reliable or efficient. along with social media such as Weibo, traders are gathering information on crop plantings, harvests, stockpiles and sales in real-time, instead of the hours of telephone surveys and physical travel that were once necessary.

Social media

“tHe trading community monitors farmers as their sentiment spreads on social media,” said Zhang Yan, an analyst with Shanghai JC intelligence Co., who subscribes to users on Kuaishou.

While traders internationally have used twitter to track opportunities, acting on everything from refinery fires and ship groundings to equity market sentiment, that’s not an option in China, where the United States-based social network is blocked.

in their thirst for data, many in China have turned to streaming apps as farmers started filming themselves to connect with others and help improve productivity, manage costs and maximize profits. that trend has been helped by changes in the domestic market for commodities.

in 2016, the country abolished its corn stockpiling program in the northeast to let the market decide prices. rather than buy up production, the government now gives subsidies to farmers to encourage them to plant crops. Yields in China are restrained by curbs on genetically modified varieties and limits on land transfers, which all add to the sensitivity of the domestic market.

the mysteries of production and stockpiling in the top commodity buyer have confused traders and analysts, roiling global markets. Corn swung widely in november as the US Department of agriculture revealed huge changes in world inventory figures after China adjusted statistics for the past decade.

that’s made disseminating and collecting information on social media a common practice.

“Quite often you’ll have farmers selling the same kind of product from different regions becoming friends,” said Zhang Xiaoran, a director at Kuaishou’s corporate social responsibility unit. “Farmers share information about production, and many actually end up selling crops for each other.”

as benchmark corn prices in China surged to their highest level in more than three years in november, traders with industry giants such as archer-Daniels-midland Co., Cargill inc. and Cofco Corp. started sending videos to each other. Bloomberg News