General Comments This was a week in which trading was heavily influenced by adjustments of spread positions. The nearby May and July corn contracts held more than a dollar premium over the December 2012 corn contract the first week of April. This type of inverted market occurs when nearby demand is strong. This spread can become wider and wider until nearby demand is sufficiently chocked off to slow consumption so as not to run out of stocks before the next harvest occurs. However, after that spread position ran up well over a dollar, market participants started to wonder how much wider it really needed to go. After all, there are only about 19 weeks remaining in the 2011/12 marketing year (ends 31 August) and the 2012/13 crop is startin...
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.