An erstwhile wise man once observed that everything in life is cyclical. We are not sure how inclusive the use of the word "everything" was intended, but those of us involved with commodities and commodity markets are certainly familiar with cycles. Thus, we noted with interest an article in yesterday's issue of The Wall Street Journal suggested another kind of cyclical movement is underway. The article highlights the flow of investment money out of funds that replicate the price action of a specifically selected, arbitrarily weighted group of commodities: the infamous index funds.Simply put, index funds mimic a specific commodity index by holding long positions in each of the commodities included in the index in volumes that reflect the...
What You Need to Know Today: Cattle futures extended their sharp selloff Friday as weakening cash cattle prices, deteriorating feedlot profitability, and reduced packer demand continued to weigh on the market. The inability of futures to sustain a rally following last week's bullish Cattle on...
As predicted, the Federal Reserve held rates steady at the last meeting before the midterm elections, likely in part because of the election (see WPI 19 October and 22 September). The decision comes at the tail end of a midterm election cycle that has been marked by the two parties campaigning...
From WPI Consulting
Forecasting developments in production agriculture
On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.