Scholarship & Research
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Item Celestial satellite and earthly crop yield : informational content of satellite-based crop yield forecasts(Montana State University - Bozeman, College of Agriculture, 2001) Chen, Zhen, 1955-2000; Chairperson, Graduate Committee: Joseph Atwood; David E. Buschena (co-chair)Since the late 70s, burgeoning efforts have been allocated to study the potential of monitoring crop conditions and forecasting crop yields via remote sensing from the satellite. An overwhelming majority of these studies shows that remote sensing from the satellite express high predictive power in crop forecasting. In this thesis, using satellite images to forecast wheat yield from 1989 to 2000 in six Montana Crop Reporting Districts (CRD), several statistical improvements were achieved over extant crop forecasting models. First, different weights were allowed for satellite images obtained at different points of time, accounting for the likely heterogeneous contributions of various crop phenological stages to the final crop yield. Second, crop acreage information was directly modeled. This, to some extent, alleviates the low-resolution problem of existing satellite imagery. Third, jackknife out-of-sample forecasts were generated to formally measure the well-known instability problem of using satellite imagery in crop forecasting across seasons. In addition, the satellite-based crop yield forecasts were compared with those of the U.S. Department of Agriculture (USDA), whose forecasts were based on traditional methods. It is shown that although meaningful crop forecasts can be generated from the satellite imagery late season, the additional yield information that can be extracted from the satellite tends to be limited. Because in the major wheat producing CRDs, the USDA forecasts are already very accurate and little independent information is observed in the satellite-based forecasts. Results suggest the needs to pinpoint crop phenological stages and to calibrate region-specific crop forecasting model.Item Satelite production forecasts : vauled with simulated futures and options trading(Montana State University - Bozeman, College of Agriculture, 2005) Martin, Lucanus Earl; Chairperson, Graduate Committee: Joe Atwood.Both the USDA and private firms are allocating substantial capital towards providing accurate and timely crop production forecasts. Production forecasts based on satellite imagery have been suggested as a means of making forecasts earlier, more frequent, and cheaper. This thesis attempts to determine if satellite data increases information with respect to crop condition and final production. If so, does the additional information have value and can it be used to make profitable trades in the futures market? These questions are answered using NDVI data for Iowa and Illinois. Jackknifed out-of-sample crop production estimates are calculated for both corn and soybeans for the individual states. A variety of models were used, each including different bi-weekly periods. USDA crop condition scores are also tested in some of the models. A model based on the current stocks-to-use ratio for each commodity is used to predict the market's expected production level. When the satellite forecast differed from the market's expectation a trade was made in the futures markets. Both futures and option strategies were tested. Results suggest that satellite based production forecasts may result in profitable soybean trades, particularly when downside risk can be reduced by trading options. Further work should focus on refining the satellite images used in the model and exploring more complex option trading strategies.