Indexes that track the prices of a specified group of commodities have become the subject of considerable controversy ever since 2008, when commodity prices bubbled and then crashed. The price crash was seen as a part of the larger U.S. economic collapse into a deep recession. Commodity index funds used investor money to go long futures contracts in the exact proportion as they were weighted in a particular commodity index. They had become an important part of the long side of a wide variety of commodity futures markets. In some markets index funds accounted for 30-40 percent of total open interest.Thanks to CFTC reports, the size of index fund long positions was highly visible. Index funds were and still are generally passive. They estab...
Key Takeaways: President Trump announced $8 billion in additional agricultural assistance through the Harvest Fuel Relief Program, as USDA projects farm fuel and oil expenses will increase 28.8 percent in 2026. The package follows $12 billion in earlier relief, while government farm payments w...
Key Takeaways: A student group from the University of Chicago is protesting to bring back onion futures trading. Trading in onion futures was banned in 1958 following a spectacular bout of market manipulation that resulted in a corner of the physical market. The ban on onion futures led t...
Beef packer margins deteriorated to $141/head last week, down $55 from the prior week as fed cattle prices strengthened while the Choice cutout remained nearly unchanged. The cutout held near $373/cwt while fed cattle prices climbed $4/cwt to $224/cwt, narrowing processor profits. Despite the d...
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.