Is it possible to commit insider trading on commodities? I don't think it is.

Yes. I work for John Deere ,but can't speak for the company.

The tractor and combines are sending real time crop data, it isn't hard for someone to look at that data and see across all farmers that yields are a bit different from what the market is predicting and make a large profit trading on that insider knowledge.

Those who work on that software and the admins of the database are registered with the SEC as not allowed to trade commodities. All that money they could make is directly out of our customers pockets and they wouldn't let us have that data if were were not protecting it.

Happy I posted my uneducated thoughts. I didn't know this.

Why not pay the farmers for that data (or share the resulting revenue) and sell the data feed to traders?

It is a zero sum game. Farmers sit on one side of the trade and farmers the other. Thus the value of the data is exactly equal to the amount farmers lose by the traders having the data.

Not quite, as the risk would be spread out. Lessening concentrated risk is providing real value.