AI, Market Manipulation and Grain Marketing

Laptop displaying a stock chart in a strong uptrend
December 25, 2023

I recently participated in a discussion regarding using AI to manipulate the grain and financial markets.

Some thoughts.

I feel the term “manipulating the markets” is misused, particularly in grain marketing.

For example, how many farmers or traders with a long position concern themselves with manipulation in rising markets?

Accusations of market manipulation most often occur in declining markets or when the price moves against one's position.

For example, I strongly believe that the 2020-2022 price run-up was more due to speculation than supply and demand, supported by the price retracement since then. There may have been accusations of market manipulation on the way up, but I am unaware of any.

Large traders can and do move the market, but focusing on the idea of manipulation discounts the reality of the market, which is the price and the direction in which it is moving.

AI has an advantage in processing large datasets quickly. Still, the secret to beating the market is riding price trends, not catching the top or the bottom.

While AI-powered funds and traders will participate, it is important to understand that all markets, traditional or cash, move similarly as the common denominator is the human participant.

AI will speed up and assist with analysis. Still, I do not believe it will manipulate the market UNLESS it is used to distribute misleading data to benefit the user's position.

Of course, the talking heads on TV and the grain trade do this each day.

As a result, I choose to spend my time on the reality of the situation, which is the price and not worry about AI.

Everything you need to know can be found in the price chart.

Trent Klarenbach | Klarenbach Research