Congratulations to 2019 Capstone Winner Alex Otten! Alex is the trading manager for Soyven, a Cargill-ADM joint venture. He received the award based on his project, ‘Decoding the CBOT Soybean Board Crush – Margin Modelling Using Quantitative Analytics’.
“This somewhat cryptic title relates to a practice known in the global soybean processing industry, largely dominated by U.S. companies like ADM, Bunge or Cargill, and recently challenged by new entrants such as the Chinese COFCO,” says Alex. “Soybean processors use derivates to forward hedge processing margins, also referred to as “board crush”. Board crush margins can trade just as volatile as the overall price environment. They change based on micro-economic factors such as global supply and demand, and macro-economic related factors like emerging market currencies. This project applies data analytics theories learned in the MS-MBA program such as multiple regression models and fundamental economic analysis in the global agricultural market environment. The project’s focus was to build a descriptive model that can predict changes in the board crush based on changes in variables of the micro- and macro-economic environment that were found to have significant impacts.”