World Perspectives

Outside Influences

Agricultural commodities comprise a very small share of the futures market, and derivatives are dwarfed by the $92 trillion capitalized in the equity markets. Last week was bloody but especially for the equities market. Agricultural commodities took a smaller hit because underlying assumptions about supply and demand did not change. Moreover, part of the decline in agriculture was due to the very sharp decline in petroleum (Nymex crude down 16.15 percent). This is because energy is an outsized component in many commodity index funds.  Markets will inevitably rebound, though the retracement for agriculture will be less simply because the fear-based losses were smaller.  ...

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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.

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