World Perspectives

Inflation/Dollar Outlooks

The flood of easy money from the U.S. Federal Reserve intended to prop up the economy in the face of COVID-19 should be inflationary. The Fed has tipped its hand by expressing a desire for inflation above its previous 2 percent cap. Food and energy are typically treated separately than core inflation since they are inherently more volatile. Nonetheless, inflation should be good for commodities since they concurrently store value.  Commodity futures have thus far been bearish with the inflation rate so far this year for unprocessed foodstuffs and feedstuffs averaging -6.7 percent. By contrast, the 20-year average is 3.2 percent for this category. The COVID-related pantry stockpiling drove the cost of finished consumer foods up 2.3 perc...

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Summary of Futures

Dec 20 Corn closed at $3.6975/bushel, down $0.0875 from yesterday's close.  Dec 20 Wheat closed at $5.5475/bushel, down $0.2025 from yesterday's close.  Nov 20 Soybeans closed at $10.225/bushel, down $0.21 from yesterday's close.  Dec 20 Soymeal closed at $338.1/short ton, down $...

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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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