NCI Market Update Webinar Series| Featuring Jeffrey McPike
Jeffrey McPike from McWheat Trading, Inc
The Northern Crops Institute (NCI) held its newest installment of the Market Update webinar series, August 18th. This month’s episode featured Jeffrey McPike from McWheat Trading, Inc.. With over four decades of experience in the industry, Jeffrey McPike has worked for a global trading house, a leading investment bank, supply chain companies in Egypt and the EU, and the largest physical brokerage firm in the world. Jeffrey has traded in the physical, derivatives, and over-the-counter markets, and now advises clients around the world on risk management and supply chain issues.
During today’s webinar, Jeffrey discussed the outlook for soybeans, corn, and wheat. He began his presentation with his soybean outlook and went into depth about how we are truly counting on Brazil to step up in the soybean market, or we will have to begin rationing our imports. Jeffrey mentioned that if Brazil ends up having a small crop, our country will inevitably have to step up. Of course, in turn, things will end up being very tight on our end of the spectrum as well.
Jeffrey then turned to the corn outlook. He recalled that back in January, corn was supposed to be the driver of the market. Now, corn has moved to the passenger seat. When we break down the numbers, we see the truth. Jeffrey mentioned that the US carryout should increase but will end up being a tight carryout for this year and the following year as well. This is based on Chinese control in the market when it comes to their impact on controls in global capacity and global export prices. In turn, we could focus on Brazil making a comeback, as long as we keep looking a year out. Things change very rapidly, but we can take comfort in knowing that we will be able to store a lot of corn without running too low.
Lastly, Jeffrey discussed the wheat outlook and how we will have to move prices to ration demand. Predictions based on the July WASDE are substantially lower than anticipated. A month ago, we would have said that we are going to feed a lot of wheat this year. This was the case until we figured out that there was a corn and wheat problem. There are production issues all over the world; four out of six major exporting areas are having major issues. Even though there is a record crop, a lot of wheat won’t be up to milling specifications. McPike shared the hard truth of the situation:
“These volatile markets are the NEW NORMAL. The days of sub$200 per ton Black Sea wheat are over and if seen again, are a major buying opportunity. The global acreage fight has just begun. And finally, one or two politicians basically control the price movements in the world wheat and corn and soybean markets”
These market updates were created to engage with past and present course participants and to offer market insight to those professionals. By providing this pertinent information on various topics, NCI has fostered growth and learning all around the world. NCI greatly appreciates contributions from speakers like Jeffrey McPike during these Market Update webinars.
Watch the presentation below!
If you’d like to see the slides from the presentation, please contact krista.j.jansen@ndsu.edu.
For more information about future webinars, please click here.