Indexes that track the prices of a specified group of commodities have become the subject of considerable controversy ever since 2008, when commodity prices bubbled and then crashed. The price crash was seen as a part of the larger U.S. economic collapse into a deep recession. Commodity index funds used investor money to go long futures contracts in the exact proportion as they were weighted in a particular commodity index. They had become an important part of the long side of a wide variety of commodity futures markets. In some markets index funds accounted for 30-40 percent of total open interest.Thanks to CFTC reports, the size of index fund long positions was highly visible. Index funds were and still are generally passive. They estab...
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...
Key Takeaways: WPI’s new EU rapeseed crushing margin models point to weaker processing returns over the next four months due to higher rapeseed procurement costs and weaker product values. Statistical forecasts call for German crushing margins to decline from €181/MT to €...
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.