World Perspectives

Ephemeral Market Reaction

Markets reportedly reacted today to the U.S. killing of Iranian Maj. Gen. Qassim Suleimani by falling in values and the price of oil rising. However, it is a classic example of a knee-jerk reaction. Middle East tensions run through the region’s history with the larger events in recent decades being wars in Iraq and Afghanistan.  Perhaps the most uncertain period of time was 2001 through 2004. However, during that period the relative values of major agricultural commodities remained tied to fundamental supply and demand (see table below). Thus, the market reaction to today’s news is ephemeral and far less important than next week’s WASDE report. As WPI’s Jody Lefcourt framed it, the news today was simply a prete...

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Summary of Futures

May 24 Corn closed at $4.2675/bushel, down $0.035 from yesterday's close.  Jul 24 Wheat closed at $5.53/bushel, up $0.0075 from yesterday's close.  May 24 Soybeans closed at $11.3425/bushel, down $0.1525 from yesterday's close.  May 24 Soymeal closed at $338/short ton, down $0.7...

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From WPI Consulting

Communicating importance of value-added products

Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.

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