NCI Market Update Webinar Series | Featuring Jeffrey McPike

Jeffrey McPike, WASEDA Commodities, Inc.

The Northern Crops Institute (NCI) hosted another monthly Market Update on August 17th, 2022. This month’s webinar featured speaker Jeffrey McPike from WASEDA Commodities, Inc. WASEDA Commodities, Inc. is a cash grain, oilseed, and renewable energy brokerage firm whose mission is to assist their customers through every step of the commodity purchasing and selling process while making it more profitable, reliable, and easier.

McPike began his presentation by looking at the drivers of global commodity prices. These include what he referred to as the “5 C’s.” They are China, corn, capital, conflict, and capacity. Each of these can have a drastic positive or negative effect on these prices. In addition to these, other factors impacting commodity prices include high inflation, remnants of the COVID-19 pandemic, rising interest rates, and tensions continuing in Ukraine and beginning to rise in Taiwan and Iran.

Chinese household consumption of soybean products.

He then transitioned to the soybean market in the global space. Production-wise, soybeans are up a significant figure from 2021 and a great departure from 2020, where it was at an all-time low due to the onset of the pandemic. Exports were largely the same, showing an increase since 2021 and an even larger increase from 2020. McPike pointed out that, while production and exports of soybeans were up compared to the year prior, household consumption of the commodity in one of the largest soybean markets – China – is actually down compared to 2020 and 2021. He theorized that this is due to ongoing lock-downs that have been imposed in China in recent months as part of their pandemic response strategy.

When specifically looking at the U.S. situation soybean situation, it also shows increase in production and exports of the commodity, and more beginning stocks and assets available for use in the production of biofuels and related compounds. This is seeing a similar trend as soybean production in that its production is increasing year after year after hitting a slump in 2020. New crop exports are also up significantly from prior years, which mirrors the other observations noted above.

Uses of corn in the United States.

Once McPike’s overview of the soybean market was complete, he moved onto the corn market. In line with the soybean market, this market has shown a resurgence in production and exports compared to years prior, though production issues have hampered this growth (ex. weather). In recent years, ethanol has emerged as one of the largest uses of corn, which also follows this trend.

He also discussed a few issues that continue to hamper the corn market, despite its growth. These include issues with production in Argentina (stemming from high inflation), tensions with China (reducing their imports of U.S.-grown corn), and others. These show no sign of elimination in the near future, with their presence likely continuing into the final part of the year.

Wheat production numbers from various nations.

Finally, McPike pivoted to discussing the wheat market. Wheat, once again, follows the path that the other two crops do. Production and exports of wheat are the highest they’ve been in recent years, which signals a recovering market from the damage of the pandemic two years ago. Breaking it down producer nation by producer nation shows that the European Union supplies much of the world’s wheat, along with Russia and the United States rounding out the top three wheat-producing nations. Though, production issues with wheat in the Great Plains region of the U.S. have the potential to put that production capability in jeopardy.

To conclude his presentation, McPike overall expectations for 2023/2024. He stated numerous items that should be on the radar of commodity traders and other individuals in the field, including crop acreage size being critical for the success of each harvest season, the ongoing Ukrainian conflict, and trade/tariff and mid-term election politics, among others. These and other factors will surely play a role in what the commodity market looks like in the next few years, and perhaps even beyond.

The Northern Crops Institute greatly appreciates Jeffrey McPike’s involvement and input in our webinar. At NCI, we continue to work towards fulfilling our mission of supporting regional agriculture and value-added processing by conducting educational and technical programs that expand and maintain domestic and international markets for northern grown crops. All of this wouldn’t be possible without the innovative ideas of guest speakers like Jeffrey McPike.

To watch the recording, click the video below.

For more information about future webinars offered at NCI, click here.