Last week’s CBOT trade rightly featured significant rallies as the U.S. weather forecast remains stubbornly hot and dry in both near- and long-term forecasts but today’s trade featured a pause amid the drought-concern rally. Futures were somewhat overextended after last week’s gains and traders elected to assess the situation and see if this week’s weather remains hot and dry before adding more “weather risk” premia to prices. As such, one might call the day’s session the calm before what is likely to be another drought-induced weather market rally. Funds were cautious net buyers in corn, old crop soybeans, and SRW wheat while selling small volumes of KCBT and MGEX wheat and soy products. The...
From WPI Consulting
Forecasting developments in production agriculture
On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.