General Comments This was a week in which trading was heavily influenced by adjustments of spread positions. The nearby May and July corn contracts held more than a dollar premium over the December 2012 corn contract the first week of April. This type of inverted market occurs when nearby demand is strong. This spread can become wider and wider until nearby demand is sufficiently chocked off to slow consumption so as not to run out of stocks before the next harvest occurs. However, after that spread position ran up well over a dollar, market participants started to wonder how much wider it really needed to go. After all, there are only about 19 weeks remaining in the 2011/12 marketing year (ends 31 August) and the 2012/13 crop is startin...
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
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.