World Perspectives

Recent Macroeconomics Analysis

The Daily Onion

Starches and protein are the largest caloric components of the western diet and WPI analyzes them all day long. Notably, the onion is one of the most important components in the Indian diet. Periodically, there is the risk of civil unrest due to production shortfalls of the vegetable. Consequen...

feed-grains soy-oilseeds wheat

Too Many Market Threads

These days we can sympathize with commercial grain and soy traders and fund managers as they try to figure out what futures prices and cash prices are likely to do and equally important, why they will do it. This is never an easy task, but currently it seems to us that there are more than the u...

biofuel

The Political/Economic Situation at Labor Day

Monday is the U.S. Labor Day holiday – it marks several things, including the nominal end of summer. With the end of summer comes a drop in gasoline demand (read ethanol) as vacation travel ends. There will be a temporary increase in meat demand for holiday barbecues, but then a seasonal...

Notable Changes in U.S. Agricultural Trade

In the year of COVID, it is difficult to assign precise reasons for changes in trade flows but following are some observations about U.S. agricultural trade in the year to date:  U.S. exports to India have taken the largest fall, but Bangladesh next door has seen the largest increase.&nb...

Aid and Trade in the COVID Election Season

Initial unemployment claims topped 1 million for the second week in a row after previously declining below that psychological line. Total initial claims were 1,006,000, which was still almost 9 percent lower than the week before but not as good as had been hoped for a couple of weeks ago. This...

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 inf...

feed-grains soy-oilseeds wheat

Ag Review - August 2020

WPI's monthly publication features a review of the past month's market and policy developments. This issue covers such topics as the commodity markets and what to watch, the status of COVID legislation and agriculture spending, the future of global trade, an analysis of markets in China and the...

feed-grains soy-oilseeds wheat

Finally, A Market to Watch

It seems as though grain and soy markets have been struggling under the weight of very large supplies and stagnant demand forever. No doubt this is an exaggeration, but as a broad generalization, markets have been mainly supply driven during the last few years. Markets have also been battered b...

Flawed Metrics

Yet another flawed study criticizes large scale farms and wrongly equates them with greater environmental damage. Kimberly Nicholas of the Lund University Centre for Sustainability Studies (LUCSUS) says that most EU agricultural subsidies go to intensively farmed areas that cause the most envir...

biofuel feed-grains

Ethanol Durability

Data from the first half of 2020 shows the pandemic’s impact on trade with U.S. agricultural exports down 3 percent compared with the same period in 2019. Meanwhile, there was a 4 percent drop in ethanol exports, which is a surprisingly small amount. While food demand changed, it mostly i...

Commodities as Investments – Again

We note with interest that several financial advisory services have begun to tout commodities as something an investor might consider adding to his portfolio. This is in line with comments from the likes of Goldman Sachs that commodities are underpriced and due for a rally in this environment o...

Drop in Food Borne Illnesses

At least anecdotally, some food industry lawyers report a drop-off in food borne illness litigation cases this year. Official data is reported by the Centers for Disease Control annually, but litigants are a proxy for industry developments. Part of the reason could be the switch in consumption...

feed-grains soy-oilseeds wheat

Farm Spending: $7 Billion Down, $43 Billion to Go

According to the Monthly Treasury Statement issued by the Department of Treasury, USDA has spent about $149.53 billion so far this fiscal year. That means there is about $6 billion left in USDA’s regular budget checking account for the last two months of the fiscal year, and the CARES Act...

feed-grains soy-oilseeds wheat

China In-Country Analysis

Macroeconomics Food Prices Up by 13.2 Percent in July For the second straight month, the cost of food in China was up year-on-year by double digits. Following a 11.1 percent increase in June, higher pork, vegetable, cooking oil, and dairy products pushed up food inflation to 13.2 percent, the l...

Gold Price Spike

The value of gold has surpassed $2,000/troy ounce for the first time. It has climbed 32 percent in value thus far this year and, given the dovish stance of U.S. monetary policy, it is likely to rise some more, eventually hitting a correction. The last peak in value was in 2011. The price of gol...

feed-grains soy-oilseeds wheat

Recession Impacts on Trade

Both the U.S. and Europe reported this week that the coronavirus pandemic sent their respective economies into the deepest plunge on record. A look at the impact of the 2007 – 2009 Great Recession for potential implications on agricultural markets from the current pandemic may or may not...

feed-grains soy-oilseeds wheat

The Pandemic, the Economy and Demand

The Federal Reserve Bank’s July meeting ended yesterday. No one expects the Fed to change its stance on record low interest rates or to ease up on its buying of government bonds and mortgage-backed securities as a means of pumping money into the economy. The minutes of this week’s F...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened lower with continued pressure from excellent corn/soybean conditions ratings and increased chatter about above-trendline or record yields this year. Wheat futures were higher in range-bound trade as buy wheat/sell corn spread trading dominated the day. The lack of new daily expo...

feed-grains soy-oilseeds wheat

Ag Review - July 2020

WPI's monthly publication features a review of the past month's market and policy developments. This issue covers such topics as the recovery in cattle prices, a new strategy in the corn market, a surge in the Chinese Dalian exchange, the role of soymeal in aquaculture, the importance of China...

feed-grains soy-oilseeds

Mid-Summer Issues and Observations

Grain and soy futures prices have been relatively quiet and range-bound lately with the exception of soyoil. Soyoil futures were trading slightly lower yesterday, but this follows six straight higher closes in pursuit of palm oil amid the buoyant outlook for edible oil. The spot August soyoil c...

Congress to Begin Debate on Spending Bills This Week

The House will take up a “mini-bus” appropriations bill on Thursday this week; it is a combination of the FY 2021 appropriations bills for the Department of State & Foreign Operations, Military Construction, Veterans Affairs, Interior & Environment, Agriculture, and FDA spen...

Highest Monthly Inflation in a Decade – That’s Good

There was a lot of interesting economic data released this week showing month over month changes that indicate the economy is picking back up – albeit raggedly. After three straight months of declines, the June consumer price index (CPI) rose 0.6 percent; that is the largest monthly incre...

Food Service Sales Lag Broader Economic Recovery

New data from the U.S. Bureau of Labor Statistics shows food service sales lagged the pace of broader economic recovery in June. Total retail sales increased 7.5 percent from the prior month and marked a 1.1 percent increase from June 2019. Conversely, food service sales increased 20 percent fr...

feed-grains soy-oilseeds wheat

Market Commentary

It was a quiet session (December corn contract volume was down 55 percent from the five-day average) in an early close before a long weekend as some profit was taken off the table, but there are still things to talk about.  Economists polled by Reuters ahead of today’s U.S. jobs rep...

The Daily Onion

Starches and protein are the largest caloric components of the western diet and WPI analyzes them all day long. Notably, the onion is one of the most important components in the Indian diet. Periodically, there is the risk of civil unrest due to production shortfalls of the vegetable. Consequen...

feed-grains soy-oilseeds wheat

Too Many Market Threads

These days we can sympathize with commercial grain and soy traders and fund managers as they try to figure out what futures prices and cash prices are likely to do and equally important, why they will do it. This is never an easy task, but currently it seems to us that there are more than the u...

biofuel

The Political/Economic Situation at Labor Day

Monday is the U.S. Labor Day holiday – it marks several things, including the nominal end of summer. With the end of summer comes a drop in gasoline demand (read ethanol) as vacation travel ends. There will be a temporary increase in meat demand for holiday barbecues, but then a seasonal...

Notable Changes in U.S. Agricultural Trade

In the year of COVID, it is difficult to assign precise reasons for changes in trade flows but following are some observations about U.S. agricultural trade in the year to date:  U.S. exports to India have taken the largest fall, but Bangladesh next door has seen the largest increase.&nb...

Aid and Trade in the COVID Election Season

Initial unemployment claims topped 1 million for the second week in a row after previously declining below that psychological line. Total initial claims were 1,006,000, which was still almost 9 percent lower than the week before but not as good as had been hoped for a couple of weeks ago. This...

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 inf...

feed-grains soy-oilseeds wheat

Ag Review - August 2020

WPI's monthly publication features a review of the past month's market and policy developments. This issue covers such topics as the commodity markets and what to watch, the status of COVID legislation and agriculture spending, the future of global trade, an analysis of markets in China and the...

feed-grains soy-oilseeds wheat

Finally, A Market to Watch

It seems as though grain and soy markets have been struggling under the weight of very large supplies and stagnant demand forever. No doubt this is an exaggeration, but as a broad generalization, markets have been mainly supply driven during the last few years. Markets have also been battered b...

Flawed Metrics

Yet another flawed study criticizes large scale farms and wrongly equates them with greater environmental damage. Kimberly Nicholas of the Lund University Centre for Sustainability Studies (LUCSUS) says that most EU agricultural subsidies go to intensively farmed areas that cause the most envir...

biofuel feed-grains

Ethanol Durability

Data from the first half of 2020 shows the pandemic’s impact on trade with U.S. agricultural exports down 3 percent compared with the same period in 2019. Meanwhile, there was a 4 percent drop in ethanol exports, which is a surprisingly small amount. While food demand changed, it mostly i...

Commodities as Investments – Again

We note with interest that several financial advisory services have begun to tout commodities as something an investor might consider adding to his portfolio. This is in line with comments from the likes of Goldman Sachs that commodities are underpriced and due for a rally in this environment o...

Drop in Food Borne Illnesses

At least anecdotally, some food industry lawyers report a drop-off in food borne illness litigation cases this year. Official data is reported by the Centers for Disease Control annually, but litigants are a proxy for industry developments. Part of the reason could be the switch in consumption...

feed-grains soy-oilseeds wheat

Farm Spending: $7 Billion Down, $43 Billion to Go

According to the Monthly Treasury Statement issued by the Department of Treasury, USDA has spent about $149.53 billion so far this fiscal year. That means there is about $6 billion left in USDA’s regular budget checking account for the last two months of the fiscal year, and the CARES Act...

feed-grains soy-oilseeds wheat

China In-Country Analysis

Macroeconomics Food Prices Up by 13.2 Percent in July For the second straight month, the cost of food in China was up year-on-year by double digits. Following a 11.1 percent increase in June, higher pork, vegetable, cooking oil, and dairy products pushed up food inflation to 13.2 percent, the l...

Gold Price Spike

The value of gold has surpassed $2,000/troy ounce for the first time. It has climbed 32 percent in value thus far this year and, given the dovish stance of U.S. monetary policy, it is likely to rise some more, eventually hitting a correction. The last peak in value was in 2011. The price of gol...

feed-grains soy-oilseeds wheat

Recession Impacts on Trade

Both the U.S. and Europe reported this week that the coronavirus pandemic sent their respective economies into the deepest plunge on record. A look at the impact of the 2007 – 2009 Great Recession for potential implications on agricultural markets from the current pandemic may or may not...

feed-grains soy-oilseeds wheat

The Pandemic, the Economy and Demand

The Federal Reserve Bank’s July meeting ended yesterday. No one expects the Fed to change its stance on record low interest rates or to ease up on its buying of government bonds and mortgage-backed securities as a means of pumping money into the economy. The minutes of this week’s F...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened lower with continued pressure from excellent corn/soybean conditions ratings and increased chatter about above-trendline or record yields this year. Wheat futures were higher in range-bound trade as buy wheat/sell corn spread trading dominated the day. The lack of new daily expo...

feed-grains soy-oilseeds wheat

Ag Review - July 2020

WPI's monthly publication features a review of the past month's market and policy developments. This issue covers such topics as the recovery in cattle prices, a new strategy in the corn market, a surge in the Chinese Dalian exchange, the role of soymeal in aquaculture, the importance of China...

feed-grains soy-oilseeds

Mid-Summer Issues and Observations

Grain and soy futures prices have been relatively quiet and range-bound lately with the exception of soyoil. Soyoil futures were trading slightly lower yesterday, but this follows six straight higher closes in pursuit of palm oil amid the buoyant outlook for edible oil. The spot August soyoil c...

Congress to Begin Debate on Spending Bills This Week

The House will take up a “mini-bus” appropriations bill on Thursday this week; it is a combination of the FY 2021 appropriations bills for the Department of State & Foreign Operations, Military Construction, Veterans Affairs, Interior & Environment, Agriculture, and FDA spen...

Highest Monthly Inflation in a Decade – That’s Good

There was a lot of interesting economic data released this week showing month over month changes that indicate the economy is picking back up – albeit raggedly. After three straight months of declines, the June consumer price index (CPI) rose 0.6 percent; that is the largest monthly incre...

Food Service Sales Lag Broader Economic Recovery

New data from the U.S. Bureau of Labor Statistics shows food service sales lagged the pace of broader economic recovery in June. Total retail sales increased 7.5 percent from the prior month and marked a 1.1 percent increase from June 2019. Conversely, food service sales increased 20 percent fr...

feed-grains soy-oilseeds wheat

Market Commentary

It was a quiet session (December corn contract volume was down 55 percent from the five-day average) in an early close before a long weekend as some profit was taken off the table, but there are still things to talk about.  Economists polled by Reuters ahead of today’s U.S. jobs rep...

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