World Perspectives

Commodity Trading Earns

Last year, the value of oil, energy, and agricultural commodities all fell. This caused reduced earnings at some large trading firms but, according to McKinsey, overall earnings in the sector rise at an average 1.5 percent per year and reached $104 billion last year. The value was sufficient to entice new players (banks, hedge funds, tech focused operators) into the market. The question for all firms, including from the hotseat of an AI operation, is always the same - where is there arbitrage opportunity? That is a dirty word (opaque, unearned) for those that do not understand how this reduces volatility. However, McKinsey points out that the threat of volatility is increasing due to rising geopolitical risks (Ukraine-Russia, China, Israel...

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From WPI Consulting

Illuminating the value of technical research

On behalf of a commodity producer organization, WPI evaluated the outputs from a project that featured a $5 million investment into technical research over multiple years. WPI’s team captured the results of this extensive effort and synthesized them for presentation to the organization’s governing board; among the findings uncovered and presented for the first time was the development of genomic traits proven, via rigorous testing, to provide crop yield advantages of 50 percent or more to U.S. farmers in times of drought. Capturing measurable results from long-term efforts can be challenging. Educating clients on the dynamics of success measurement when quantifiable results are not readily available requires deep client-consultant collaboration and an ability to consider both near- and long-term client aspirations with market/policy dynamics – attributes that WPI brings to every consulting engagement.

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