Example: “Buy two Maypork bellies at the market when August pork bellies sell above 55.00.”“Spread” orders are used to establish or close out spread or straddle positionsand can be used in a variety of ways.An “inter-market spread” is the purchase of a particular commodity futureon one market and the sale of a contract for the same commodity on another market. Example: “Buy two May wheat, Chicago, at the market and sell two Maywheat, Minneapolis, at the market.”An “intra-commodity” spread is the purchase of a futures contract for a givenmonth and the simultaneous sale of a futures contract for the same commodity ina different month on the same exchange. Example: “Buy two May pork belliesand sell two July pork bellies when July is three cents over May.”82
The Order
An “inter-commodity spread” is the purchase of a futures contract for a givencommodity and the simultaneous sale of a futures contract for a different but related commodity. Example: “Buy three July wheat at the market, sell 20 July corn atthe market.”When entering a spread order, the buy part of the order is always given first.Note: Many brokers and exchanges do not accept complex combinationorders. Check with your broker about his practices.
PLACING THE ORDERIt is important when placing orders to give your broker complete and clear instructions whether you want to BUY or SELL; the QUANTITY (quantity in some commodities is given in number of contracts, while in others it is given in number ofunits of the commodity; for example, “two pork bellies” refers to two contracts;“five wheat” refers to 5,000 bushels or one contract of wheat); the EXCHANGE onwhich you wish to trade (some commodities are traded on more than one exchange);the MONTH you wish to trade; the length of TIME you want the order to stand; thePRICE; and, of course, the COMMODITY. This may sound like extremely rudimentary advice, but it is surprising how many misunderstandings result from failure to ensure that the broker knows exactly what the customer wants done.
ELECTRONIC TRADING ORDERSThe advent of electronic trading has made the order entry process at once more complex and simpler. It is more complex because each system (and there are severalin use) is independent and follows different rules. Most brokers place more responsibility on customers to track their orders. Orders entered but not executed duringthe electronic trading session may be automatically canceled so as to not carryover into the next day’s pit trading. Therefore, there is great need for customers totake serious responsibility for tracking their orders.It is simpler because the computerized systems cannot handle and will notaccept some of the complex contingent and combination orders that a good broker can accept and get executed.
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Chapter 9
Forecasting Prices—Supply and Demand
One of the most popular myths in commodity price forecasting is that there is amagic formula for accurately predicting prices and that someone, somewhere,holds the secret to that formula.A few years ago a member of a major commodity exchange told me excitedly that, after eight years of trading and searching, he had discovered the method forforecasting pork belly prices. A few months later he had to sell his membership onthe exchange to pay his debts and began working as a brokerage house clerk.Apparently he had staked all he had on his newly discovered secret, only to learn,as did countless others before him, that his magic formula was really a witch’s potion.The price of a commodity at any given instant does not pop from a bubblingcauldron but is the result of decisions on the part of both buyer and seller.Presumably, both traders, after careful analysis of all the factors, have concludedthat the price was the best for them under the circumstances.How did they arrive at their decisions? Most likely through a combinationof fundamental analysis and technical analysis. Fundamental analysis refers to the85Copyright 2001 The McGraw-Hill Companies. Click Here for Terms of Use.
Chapter 9
study of those elements that affect the physical supply of and demand for a particular commodity. Technical analysis refers to the study of market activity itself:prices, trading volume, open interest, and other numerical data.This chapter contains a cursory look at fundamental analysis. Those who wouldlike to delve deeper into the subject can find it in any good basic economics text. Thisdoes not mean to imply that fundamental analysis is more important or better thantechnical analysis in price forecasting. As a matter of fact, most successful tradersutilize both approaches, the fundamental approach for identifying long-term trends,and technical analysis for timing of trades and identifying short-term trends.
FUNDAMENTAL ANALYSISA contractor starting to build a house has a definite objective in mind, namely, thecompleted house. Likewise, the price analyst must have a definite objective. It canbe narrow and specific, such as an explanation of the movement in beef pricesduring the last six months, or more general, such as the probable effects on pricesof a new government policy or program.The building contractor needs certain things to accomplish his objective, i.e.,a detailed blueprint or plan, tools, materials to work with, and a technique. Theprice analyst also needs a plan. He needs a knowledge of basic economic conceptsin order to avoid costly errors and to ensure that he remains on target. The price analyst must have material to work with in the form of data and information, and heneeds techniques for utilizing the data to build, step-by-step, toward his objectiveof accurately forecasting commodity prices.A good place to start understanding this process is with the meaning of acouple of pretty important words: “supply” and “demand.”
DemandThe term “demand” is used by different people to mean different things. It is oftenand not quite correctly considered synonymous with “consumption” or with the“quantity” of a commodity moving into market channels. To an economist, demandrefers to the quantity of a product or service that buyers are willing and able to buyat a given place, time, and price. Normally, the quantity people will buy variesinversely with the price; that is, as the price goes up, the amount bought goesdown, and vice versa.In general, consumer demand for a product or a service depends on fourmain factors and may change when any of the factors change:1. Real income or purchasing power of consumers—as people have moremoney to spend, they will usually spend it.
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2. The number of consumers—as the number of people grows, so does thetotal demand for products.3. The price and availability of substitutes—chicken as a substitute for pork;hence, if the price of chicken goes up relative to the price of pork, peoplewill tend to eat more pork and less chicken.4. Consumers’ personal tastes and preferences—if people suddenly decidethey like pork better than beef, their preferences will be reflected inincreased demand for pork.As noted, the price of the product and the quantity bought are closely related. However, this relationship varies, depending upon the commodity. If sirloin steakgoes up 50 percent in price, consumers might start pushing their shopping carts rightpast the steak cooler. However, if the price of table salt were to rise by 50 percent,sales of salt are not likely to fall very much. In one instance, there are several alternatives; in the case of salt, there are few and it’s a necessity. By the same token, a10 percent change in the price of pork may cause a 12 percent change in the amountof pork purchased.The degree to which the quantity bought changes in response to a change inprice is described by the frightening term, “price elasticity of demand.” This isnothing more than an index number devised by economists to describe how far purchases will go in one direction when price goes in the other. For example, the priceelasticity for all beef has been estimated at 95. This means that a 10 percent increasein the price of beef is associated with a 9.5 percent decrease in the amount of beefbought. Expressed another way, it means that people tend to tolerate moderatebeef price increases and go on broiling hamburgers.A full understanding of elasticity and what it means will enable you to estimate the amount of price change necessary to clear a market of a given amount ofproduct. For a complete discussion of this subject, consult any good introductorytext on economics, marketing, or price analysis.
SupplyJust as you can’t cut a piece of cloth with one blade of a scissor, you can’t determine price by considering demand only. The other blade of the price-determiningscissor is supply. Recent experience has shown that the demand for commoditiesremains relatively constant over short periods of time. This is particularly true indeveloped economies such as the United States, where consumer habits changeslowly and incomes do not fluctuate sharply. Therefore, supply must be given careful consideration in price analysis and forecasting.Generally speaking, the short-term supply of an agricultural commodity ismade up of the carryover from previous growing seasons, the current year’s pro-
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duction, and imports. There is no carryover, of course, for unstorable commodities such as live cattle or hogs, but in commodities such as grains, carryover is animportant part of supply.Most data published on agricultural, food, and fiber commodities by theUSDA and other sources deal with supply, because it is more readily measuredthat demand. Periodic reports based on producers’ stated intentions as well asmeasurements of actual yields at the end of a season provide a relatively accurateindication of the forthcoming supply of a commodity. Ask your broker for suchreports or get on the mailing lists at the U.S. Departments of Agriculture, Commerce,and Treasury to receive their reports directly.As used by economists, the term “supply” means the quantity of a productor service that would be made available by sellers at a specified place, time, andprice. Just as buyers will take different amounts of a commodity depending on theprice, so sellers are usually willing to sell different amounts at different prices.Normally, the quantity of a commodity offered for sale varies directly with theprice; that is, when the price goes up, the amount offered for sale goes up, andwhen the price goes down, the amount offered for sale goes down. As in the caseof demand, the concept of elasticity also applies.The quantity of a commodity offered by sellers at a given price is also influenced by the commodity’s storability. The willingness to sell from stock on handdepends on the owner’s comparison of current prices with what he thinks he mightget if he held on to his commodity a while longer. On the other hand, the supplyobtained directly from current production is affected more by such things as weather, yields, acres planted or number of animals bred, quantities and prices of feed,and other costs of production (see Figure 9.1).The longer-term supply of a product is determined by the total number ofpotential producers; the capacity of the facilities they operate; their proficiency asproducers; the physical characteristics of production of the commodity, such as thelength of life of fruit trees; the producer’s own personal expectations; the relativecosts of production for alternative products; and certain social and institutionalinfluences, such as the historical tendency of corn farmers to continue to plant corn.Armed with an understanding of what it is that makes up supply and demandfor a commodity, the analyst is then ready to organize these elements in such a waythat he can judge their collective effect on price. In other words, the analyst candevelop a “model”—a diagram of what affects prices and how. It should be notedthat models are simplifications of reality. No model can include all of the relationships that affect price, and, indeed, it would be a waste of time to attempt to do so.The important thing is that the model includes the major factors and shows the realinterrelationships between them. The diagram on the next page is a model of howsupply and demand interact to affect the prices of pork. The lines connecting the elements show the interrelationships. Studying this diagram will help you in notingwhich statistics have a direct and meaningful impact on the price of hogs.88
Forecasting Prices—Supply and Demand
Figure 9.1 The Demand and Supply Structure for Pork
Arrows show direction of influence. Heavy arrows indicate major paths of influence which accountfor the bulk of the variation in current prices. Light solid arrows indicate definite but less important paths. Dashed arrows indicate paths of negligible, doubtful, or occasional importance.
CONSUMER IS KINGAll demand begins, of course, with the consumer. In the absence of a demand byconsumers for a product, there would be no demand by retailers, wholesalers, orprocessors. This demonstrates the importance of beginning a price forecast withan analysis of consumers’ demand for the end product, or at least working from thepoint closest to the consumer.Experienced analysts learn to study those factors that affect demand and supply at each level of the system. They learn, for example, that when the packers areoperating plants at less than optimum capacity because of a lack of hogs for slaughtering, they bid up the price of hogs. And that during periods of inflation, the priceof beef usually rises more than the price of pork. The analyst also learns that these89
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factors do not operate instantaneously, that there are time lags built in. It takesweeks for a rise in the demand of pork at retail to be fully transmitted back to thefarmers in the form of higher prices for hogs. Likewise, an increase in the supplyof hogs at the farm level is not transmitted into lower retail prices right away.When analyzing the effects of changes in supply and demand, the analystmust be careful not to confuse causal relationships with movements that are simply associated. Some years ago, a researcher reported that annual changes in theprice of pork seemed to be related to changes in the price of beef. Some jumpedto the conclusion that changes in prices of beef caused changes in pork prices.Later, analysts discovered that changes in pork prices were almost completelyaccounted for by changes in market supplies and consumer incomes. The reasonfor this apparent cause-and-effect relationship was that beef and pork prices areaffected by the same domestic demand conditions. Naturally, therefore, they tended to fluctuate together.Prices are not generated automatically by the factors of supply and demand.Prices are actually “discovered” through a process of give and take on the part ofthe buyers and sellers. Market traders collect, analyze, and interpret all the information and facts they can about supply and demand. Then on the basis of theiranalyses, they make bids and offers, back and forth, until finally two people agreethat a particular price is satisfactory to both. When the transaction is made, theprice is generated. It’s like a giant computer.
WHERE TO GET DATAFor the beginning trader or non-professional, doing your own data gathering andanalysis is generally out of the question. You really have to rely on your broker,his sources, and his research team. Don’t work with a broker that does not keep youinformed of fundamental economic reports and news that affect the commoditiesyou trade and, especially, those in which you have positions. Knowing the releasedate of a report is crucial for the trader. Markets anticipate reports, and prices willadjust prior to release of the report in anticipation of what the report will contain.Sometimes, of course, the market is wrong in its anticipation, and prices that wentup expecting a bullish report will immediately go down when the report is foundto be bearish. Most smart traders try to be out of the market or at least in a protectedposition at the time major reports are released. This is just good common sense.Do not try to outguess the market. Take time to study and analyze new information before committing yourself to a position.If, however, you are interested in doing your own analysis, a lot of the datayou will want are available directly from reports of the U.S. Departments ofAgriculture and Commerce and several private market reporting agencies. Thesereports tell in great detail the daily, weekly, and monthly price movements, market90
Forecasting Prices—Supply and Demand
receipts, and other associated factors and are useful in following current situationsas well as in long-term forecasting. Most of the government reports are availablefor free. Anyone working regularly in the field of price forecasting and analysisshould ask to have his name placed on the mailing lists of the government agenciesissuing reports. For a list of the available reports, write to: Superintendent ofDocuments, Government Printing Office, Washington, DC 20250. At the end ofthis chapter several government reports, as well as a number or private sources,available on specific commodity groups, are listed.Private market reporting services are available for many commodities. Inaddition, many trade organizations collect and publish information about theirindustry on a regular basis. Magazines, newspapers, and wire services report information about USDA statistics and the markets on a daily basis. Many of the articles contained in Futures magazine deal in depth with analysis of individual reportsand commodities. Your broker should be able to keep you posted on the timing ofthe reports, and he should also be able to give you a quick summary of the contents of reports after they are released.In addition, most exchanges provide relatively complete statistical summariesand pamphlets explaining, in a simplified way, the fundamental supply and demandfactors affecting prices for individual commodities. For example, the ChicagoMercantile Exchange publishes daily bulletins containing summaries of the previous day’s futures trading and the important cash market statistics. It also publishesyearbooks containing information covering a whole year, special periodic summaries of important governmental reports, and an excellent series of pamphletsexplaining how to analyze the fundamental factors affecting each of the majorcommodities traded.
GOVERNMENT POLICIESAs in most aspects of life, the government plays a major role in the pricing ofproducts, and all fundamental analysts learn to watch closely the activities of thefederal and state governments in encouraging or discouraging production, controlling imports and exports through embargoes and quotas, developing storageprograms, and establishing price ceilings and floors. There are many such government programs in existence, and virtually all affect prices in some way.
WHAT TO LOOK FOR AND WHERE TO FIND ITOther chapters of this book set forth, in basic form, some of the modus operandifor analyzing futures price movements. What follows in this chapter provides a guide91
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for selecting the type of information you should plug into a model for a particularcommodity.No attempt is made to be exhaustive in presenting the factors that may affectthe price of a commodity. Nor are these data complete in covering all commodities traded on the various exchanges. Rather, the purpose is to be introductoryonly—to provide the new trader with an awareness of some of the kinds of information to seek out and where to find it.You will still have to ask yourself these questions:1. Which of these factors is most important?2. Why is this particular piece of information important?3. How does change in a certain factor affect prices?You will note that sometimes the same factors appear on both the supply anddemand sides of the price-making equation. This is because some factors interactto affect both sides. A worthwhile and fascinating but frustrating experiment is totake the supply/demand factors outlined for a commodity and arrange them in aschematic diagram to show their interaction and relationships to each other. Suchan exercise would show you that there is no one interpretation of data, no singlemodel that is “correct.” In fact, the differences in interpretation of such information are what make a market. In the final analysis, the greatest satisfaction (asidefrom the monetary gain) derived from commodity futures trading lies in interpreting the available facts better than anybody else and being “right.” It is of coursethe fact that such fundamental data is not easy to analyze or interpret, unless youare very experienced, that causes most traders to become “technicians.”
GOVERNMENT INFORMATIONThe U.S. government is probably the most important source of information forthe commodity trader. And best of all, the information is usually available free.Virtually every major governmental agency or department collects information ofsome kind from the public at large or from the industry of its concern. Carefulanalysis of this information can be extremely helpful in trading.In addition to the general supply/demand data, you also should try to understand the people who are trading the markets. To this end, it is suggested that youstudy the Commitment of Traders Report issued bimonthly by the CFTC. Eachday the names of individual traders who have large positions are reported to theCFTC. This information, along with a good deal of other information concerningthe cash market activities of the individual, is then used in the CFTC’s market surveillance activity.
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Once a month the accumulated data about these trader positions, their classification as hedger or speculator, and the percent of the contracts owned by thelargest four and largest eight traders are released to the public. Although the dataare slightly out-of-date by the time they are released, they do provide some guidance as to whether hedgers or speculators are dominating any one side of the market and how they are changing their positions from month to month. When you couple that information with the price activity and trend, you can get a hint of whatlarge speculators or large hedgers believe will happen to prices and how they aregetting into a position to take advantage of it.It would be misleading to place too much emphasis on the current value ofthis information. However, the CFTC regularly makes some changes in the reporting system to provide even more detailed analyses of the makeup of the market andto provide the data in a more timely fashion.In addition to government reports on many topics, there are also a numberof publications available from private sources or from commodity organizations.Daily newspapers and financial publications provide important information on aregular basis, and most exchanges also have a number of helpful publications available to the public. Although it would be impossible to list all of these sources, hereare some of the key ones covering most commodities regularly:Futures magazine, 219 Parkade, Cedar Falls, IA 50613The Wall Street Journal, 22 Cortlandt St., New York, NY 10007Journal of Commerce, 110 Wall St., New York, NY 10005Barron’s, 22 Cortlandt St., New York, NY 10007The New York Times, 229 W. 43rd St., New York, NY 10036Commodity Yearbook, Knight-Ridder, Trade Center25 Hudson, New York, NY 10006
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Chapter 10
Basic Price Patterns—Forecasting Tools
Remember the old comedy record of a Frenchman describing the first Americanfootball game he had ever seen? Looking at commodity price movements on aday-to-day basis without an understanding of the underlying patterns can makeabout the same amount of sense.These underlying patterns take several forms. Some movements reflect seasonal influences, some are cyclical. There are also trends to be considered. All ofthese price movements may be further divided into those of short-term and thoseof long-term duration.Short-term price fluctuations are due mainly to sudden shifts in the demandfor, or supply of, a commodity as a result of reactions to weather conditions, political moves, international developments, rumors, technical “signals,” or chanceoccurrences. Long-term price fluctuations are the result of fundamental or gradual shifts in demand and supply resulting from more enduring factors such aschanges in production technology, consumer preferences, or population growth.
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SEASONAL MOVEMENTSAll agricultural commodities and many financial instruments have some seasonality in production and marketing. Perishable and semi-perishable commoditiesnot stored by dealers have to be moved into consumption as soon as possible afterproduction. As the available supply of these products increases, consumers will buythe added quantities only at lower prices. When the supply falls off, consumers arewilling to pay higher prices. That’s why prices are usually more volatile for perishable commodities than for non-perishables. Figures 10.1 and 10.2 show theconsistency over 10 years, five years, and three years of seasonal factors in cattleand pork bellies.Non-perishable commodities (those that can be stored) are usually lowest inprice at harvest time but tend to rise during the rest of the year only by an amountsufficient to cover the accumulated cost of storing. Consequently, the season’ssupply is fed into consumption in relatively uniform amounts from month to month.As a result, prices are more uniform throughout the year than for perishable commodities.Financials also have seasonal trends reflecting debt-issuing cycles by governments, elections and political cycles, and business cycles. For example, theU.S. Treasury holds major bond auctions every three months to issue three-year,10-year, and 30-year debt for financing the government. These auctions have asignificant influence on interest rate futures and currency futures.
Figure 10.1 Cash Seasonal Omaha Pork Seasonals
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Figure 10.2 Pork Belly Seasonals
Seasonal variation in commodity prices is frequently misinterpreted. Thetrue seasonal movement in prices can be observed only by taking average pricesover a long period. And keep in mind that this represents history—it does not necessarily predict the future. The average or so-called “typical” seasonal price movement does not occur regularly each year. In fact, month-to-month changes in priceare quite different in different years. The seasonal price variation merely represents a general tendency.Wheat provides an excellent example, as it is one of the commodities thattends to follow a distinct seasonal price pattern. Generally, low prices in wheatoccur during the summer harvest season, with higher prices in winter and spring.
CYCLICAL MOVEMENTSAlmost any regularly recurring movement can be called a cycle. But in commodities, this term is usually applied to the more-or-less regular rise and fall of production and price over an extended period of time. Cycles are self-energizing,which means that one part of the movement follows or is caused by another part.This makes cycles, to a certain extent, predictable.There are several well-known cycles in the production and price of a commodity. High prices not only encourage new producers to enter into production, but97
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influence existing producers to produce more. As market receipts increase, pricesdecline until they reach a point where some producers become discouraged and dropout while others simply reduce their operations. As the contraction continues,prices rise until they again reach a level that encourages expansion, marking thebeginning of a new cycle. Figure 10.3 showing changes in hog prices and porkproduction demonstrates this action.Often there are time lags associated with cyclical movements. For example,livestock marketings tend to lag behind production on the upswing of the production cycle because, as production increases, a larger proportion of available animals must be retained for breeding purposes. On the downswing, a smaller thanaverage number of animals are retained for breeding and farmer marketings aretherefore larger than the total number of animals on farms would indicate. In anticipating the effects of the production cycle on price, you have to take into accountthis shifting lag of production and receipts. Further, the length of time it takes production to change will vary according to the time it takes to bring the commodityto market. For example, in hogs, it takes three to four years for a cycle to be completed; in cattle, it takes six to eight years. Clearly, business and financial cyclesalso exist.
Figure 10.3 Changes in Hog Prices and Pork Production
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TRENDSLong-term changes in supply or demand, whatever the causes, may result in gradual increases or decreases in prices. Such long-term changes are referred to as“secular trends.”The steady growth in population, the gradual development of new uses fora commodity without a proportionate increase in supply, changing customs, changesin purchasing power, and gradual changes in the technology of production all mayhave some effect on supply and demand over the years, forcing prices into higher or lower ranges. Meanwhile, of course, the price is fluctuating from day to day,season to season and, possibly, from cycle to cycle.
STATISTICAL TECHNIQUESArmed with some understanding of the supply and demand factors that can affectcommodity prices, you are now ready to apply statistical techniques to analysis ofthe data. There are many. Selection of a particular technique or combination oftechniques depends on the nature of the problem, the nature of the data and, tosome extent, on your personal preference.We’ll treat only a few of the more popular methods here. We can only familiarize you with the basics. It would take a separate book—and many have been written—to explain any one of them.
RatiosFor long-term forecasting, a great many experienced traders consider certain ratios,such as the hog/corn ratio, as reliable indicators.The hog/corn ratio is used in forecasting hog prices. It is calculated by dividing the price of hogs per hundredweight by the price of a bushel of corn. (If the priceof hogs is $20 per hundredweight and the price of corn is $1.50 per bushel, thehog/corn ratio would be 20 ÷ 1.50 = 13.33.)Changes in this ratio give you an indication of the profitabilty of hog feeding and help forecast an increase or decrease in the number of hogs fed. Low ratios(below 12) suggest narrow profit margins and low future production, while highratios indicate higher profits and greater future production.
Moving AveragesA moving average is a flexible trend line that has been “smoothed out.” If annualor monthly data are used, the moving average will reduce the effects of cycles,
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seasonal variations, and irregular movements, giving you a better idea of underlying supply and demand strength. But the longer the period chosen, the greater thelikely time lag between a change in the trend of prices and the indication of thischange by the moving average.Active traders prefer to plot moving averages over short time periods. Fiveday, 10-day or 20-day moving averages are commonly used although some methods use four-, nine- and 18-day moving averages. The example in this chapter isbased on a 12-month period. The method, however, applies to any time period.To build a moving average:1. Select a time period or number of weeks that seems to best represent thecycle or seasonal element that you are most interested in smoothing out.As an example, if you want to eliminate the seasonality in pork prices toidentify the long-term trend, you should use a 12-month period.2. Average the prices for that 12-month period in order to obtain the firstnumber of the moving average.3. To figure out the second number in the moving average, drop the price forthe first month and average the next 12 prices in the series. And so on.Table 10.1 shows how to calculate a 12-month moving average for retailpork prices.
Index NumbersHigh on the list of most useful statistical measures are those telling you how muchchange has occurred from one period to another or how change in one elementcompares with change in another element. For example, you may want to use anindex to compare the production of corn in one year with the production of cornin another.The usefulness of index numbers is by no means limited to changes in theprice or production of single commodities. They are widely used to express changesin such complex economic areas as the cost of living and business cycles. These,of course, involve combining many prices or quantities in such a way that a single number can be used to indicate overall changes. The “cost-of-living index” isperhaps the most well-known of these; the Dow Jones index of leading stocks isalmost a household word. We are more concerned here, however, with a simpleindex that pertains to one commodity.Suppose, for example, that we wanted to develop an unweighted index tomeasure the change in the average price of a barrel of oil over eight periods. Wewould divide each period’s price by the initial price and multiply by 100.
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Table 10.1 Building a Moving Average
JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberJanuaryFebruaryMarch
AveragePrice/Pound
Moving Average
76.6876.4076.0374.6374.7274.7275.3774.4471.6469.4966.1363.9863.8964.8265.29
874.23 ÷ 12 = 72.85861.44 ÷ 12 = 71.88849.86 ÷ 1