Vol.:(0123456789) Quality & Quantity https://doi.org/10.1007/s11135-018-0782-x 1 3 On the relationship between weather and Agricultural Commodity Index in India: a study with reference to Dhaanya of NCDEX Chinnadurai Kathiravan 1  · Murugesan Selvam 1  · Desti Kannaiah 2  · Kasilingam Lingaraja 3  · Vadivel Thanikachalam 1 © Springer Nature B.V. 2018 Abstract This paper proposes to investigate the Co Movement and Causal Relationship, among the three weather factors (temperature, humidity, and wind speed) and the returns of the Agriculture Commodity Index called Dhaanya, in India. The study employed the second- ary daily data of weather in fve sample cities (Chennai, Mumbai, Delhi, Kolkata and Hyderabad), and Agriculture Commodity Index called Dhaanya, in India. Statistical tools like Descriptive Statistics, Unit Root, Correlation Matrix, and Granger Causality Test were employed. This study found that the temperature and wind speed infuenced the inves- tors’ mood in Chennai and Mumbai, in respect of Agriculture Commodity Index, namely Dhaanya. The fndings of this study would help the investors in making investment deci- sions rationally, on the basis of weather condition. Keywords Weather factors · NCDEX · Descriptive statistics · Unit root test · Correlation matrix · Granger causality test JEL Classifcation F65 · G02 · C1 · C58 · N2 1 Introduction The global agricultural commodities market always faces sudden ups and downs, due to weather efect in the past and the climate changes, during Twenty-First Century. All aspects of commodity price are mainly afected by weather changes, commod- ity access, commodity utilization, and commodity price stability (Porter et al. 2014). * Chinnadurai Kathiravan kathirnba@gmail.com 1 Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirappalli, Tamil Nadu 620 024, India 2 James Cook University, Singapore, Singapore 3 Faculty of Management, Bharathiar School of Management and Entrepreneur Development (BSMED), Bharathiar University, Coimbatore, India