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...
What You Need to Know Today: Commodities were mostly lower across the board today after yesterday’s Federal Reserve meeting hinted at a potential interest rate hike later in 2026. The dollar index reached its highest level in over a year, and a strong dollar makes U.S. agricultural expor...
Tomorrow is the Juneteenth federal holiday, and the USDA, along with the rest of the federal government and the CME, will be closed, so the monthly Cattle on Feed report was released a day early. The total number of cattle on feed in feedlots with 1,000 head or more capacity on 1 June amounted...
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.