After 3 exceptional years, the DCA Potato Bingo for the 2019 harvest year has literally achieved an average sales result. By trading emotionlessly on the potato futures market, based on bingo balls, this strategy achieved a special return.
The past 3 harvest years have been exceptional. Exceptional growing conditions result in a high or low market price. For example, the DCA Potato Bingo achieved its highest result ever for the 2018 harvest year (€26,34 per 100 kilos). This is in stark contrast to the €8,98 achieved for the 2017 harvest year.
Drought again
The 2019 harvest year is completely different. This year was also largely dominated by drought, which meant that the potato sector already started the new season with a shortage. Ultimately, the drought in many growing areas proved to be less severe than the year before, resulting in an average to slightly below-average harvest. It was mainly a struggle to get the last hectares above the ground, which sometimes could only happen this spring.
The April 2020 contract expires on Friday, April 24. The DCA Potato Bingo has already had its last draw. These harvest moments are a year ago determined by drawing bingo balls. Divided into 9 portions of 6 weeks each, a completely random strategy is determined. The number on the ball determines the sale date. This last sales date for the period weeks 10-15 was on Tuesday, March 31. This means that the final score can already be determined.
Few fluctuations in results
Despite an erratic graph of the closing price, bingo managed to achieve sales results that did not differ much. Between week 14 of 2019 and week 9 of 2020, the maximum spread was €3,70 (€14,90 to €18,60). This does not include the last sales moment, in which a price of €2,70 was achieved.
This results in an average bingo result of €15,42 per 100 kilos of fries potatoes. This result can rightly be called average. In 6 of the 12 previous years the sales price was lower and in 6 years it was higher. It is all the more striking that the average sales result over all years is €15,57. This means that the bingo of the 2019 harvest year can rightly be called average.
Bingo shows added value
How does Potato Bingo perform compared to other sales instruments? Bingo often has a predictive value for the various potato pools that present their results in June. After all, they too average their sales. How the pools perform largely depends on how many unsold potatoes were still available before the corona crisis. The Potato Bingo was 'lucky' that the damage here remained limited.
This is also noticeable in the Cash Settlement. The CS of week 14 amounts to €3,10 per 100 kilos. The question now is whether the CS will fall further in the next 3 weeks, or whether it will stabilize at this level. It illustrates the dramatic outcome for the sector. The DCA PAT Index can also be averaged and yields a result of €12,60 per 100 kilos over the bingo period. This means bingo scores €2,82 higher. Potato NL's chip potato quotation scores slightly higher and amounts to €13,06 per 100 kilos. The difference with bingo is then €2,36.
The sales times for the 2020 harvest year will soon be determined through the well-known bingo game. 9 balls are drawn that correspond to periods of 6 weeks. This way, a sales strategy on the potato futures market can be formed completely emotionlessly.