World Perspectives

Dollar versus Exportable Stocks

Chicago futures have major agricultural commodities at some of their weakest prices in years and yet exports do not seem to be responding to their appeal. In part this is because the U.S. dollar index has climbed from 88.67 in January 2018 to 102.82 on 18 March of this year – effectively a 16 percent increase in the export tax. However, the dollar alone does not explain the downbeat situation since competitive global demand is an even stronger component. Over the past five decades, the dollar has an average R2 of -0.43 but during years when the dollar is strong and global surplus stocks are concurrently, there is an outsized impact. In 1979, when global stocks were down 43 percent, U.S. corn exports soared despite the dollar. In 2012...

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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.

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