Macroeconomic trade largely defined price action in the ag markets on Tuesday as higher-than-expected CPI inflation spooked markets. The U.S. CPI came in above expectations at 3.1 percent, which sent the U.S. dollar index sharply higher as it implies the Fed will have to keep interest rates higher for longer. For commodity traders, the big implication from the CPI numbers is that the U.S. dollar is likely to remain higher for longer, which will pressure U.S. grain (and meat) exports. That dynamic was on display Tuesday as wheat futures – a commodity among the most sensitive to the U.S. dollar – fell to new contract lows. Funds were net sellers for the day across wheat, soybeans, soymeal, and the livestock contracts but were mode...
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.