We have commented before about the broad negative impact that the worldwide coronavirus pandemic is having on demand for raw materials ranging from copper and energy to renewable commodity crops such as grain, oilseeds and cotton. This situation, along with the strange decision by the Saudis and Russia to keep their oil pumps running, has resulted in the current huge surplus of crude oil supplies along with a shortage of storage capacity. However, producers of copper, crude oil and similar commodities can control production in the face of falling demand if they chose to. Realistically, producers of renewable crops around the world do not have the same flexibility. “Demand destruction” is a term used so frequently in the last th...
Macro: Treasury Squeezes Yields, the Dollar Gives Way Today’s markets are offering a lesson in pressure: it rarely disappears — it simply moves. The U.S. Treasury stepped into the bond market after long-term yields surged to levels not seen in nearly two decades. By announcing plans...
Key Takeaways: Weather conditions in Europe have continued to deteriorate following both the EU MARS’ latest balance sheet update and the August WASDE, leaving “official” estimates lagging behind the reality observed on the ground. WPI’s models anticipate a 4 perc...
Key Takeaways: With cattle supplies historically tight and packer margins deeply negative, beef processors are reducing excess slaughter capacity, with decisions over which plants to close driven by cattle availability, operating efficiency, and the ability to maintain high utilization rates...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.