Open interest is rising in commodities and Goldman Sachs says that with inflation likely to return, the outlook is bullish commodities. While agriculture is hot right now, metals and energy will eventually take over. This ignores the real supply/demand situation in agriculture. China says it is only buying 7 MMT of corn but has purchased 10 MMT, and some believe it could go as high as 27 MMT. The difference between 7 and 27 is approximately $3.2 billion. There is also the risk of over-stoking commodity prices. At this juncture, end-users are showing they will pay the higher prices and the lower end of trading ranges is moving higher. But eventually this all peaks and it is back to pullbacks. This morning’s USDA Export Sa...
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.