Analysts see a 20 percent (-4 MMT) downgrade in Australia’s wheat production possibly in this week’s WASDE report, and rising expectations that Russia’s production may be off a bit. Wheat prices have been firming on the board as a result. Still, global stocks are large. The stocks to use ratio is a standard metric for considering the value of wheat and while they correlate, they are not perfect. There tends to be an over-reaction in price or tail effect when stocks look to be tighter, as in 2007 and 2012 (see graph below). If the same over-reaction were to occur when stocks are larger than deemed necessary, the current price would be lower than it is currently. However, there is always a stronger reaction to fear of...
What You Need to Know Today: The corn and soybean markets closed slightly higher in low-volume trade. The wheat market was mixed, with HRW continuing its downward trek on improved moisture. As expected, the bearish cattle on feed report drove down cattle prices and pulled hogs down with it. Mi...
Key Market Insights Macro markets delivered a full whipsaw today. Early in the session, crude oil had rallied back above $100/barrel as traders priced renewed concern over the U.S.-Iran standoff and potential supply risk through the Strait of Hormuz. That strength helped pull grains off their o...
From WPI Consulting
Weighing in on strategic realignment
WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.