Open interest is rising in commodities and Goldman Sachs says that with inflation likely to return, the outlook is bullish commodities. While agriculture is hot right now, metals and energy will eventually take over. This ignores the real supply/demand situation in agriculture. China says it is only buying 7 MMT of corn but has purchased 10 MMT, and some believe it could go as high as 27 MMT. The difference between 7 and 27 is approximately $3.2 billion. There is also the risk of over-stoking commodity prices. At this juncture, end-users are showing they will pay the higher prices and the lower end of trading ranges is moving higher. But eventually this all peaks and it is back to pullbacks. This morning’s USDA Export Sa...
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.