Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

Haviland’s expertise is macro. He focuses on the intertwining of equity, debt, currency, and commodity arenas, including the political players, regulatory approaches, social factors, and rhetoric that affect them. In a changing and dynamic global economy, Haviland’s mission remains constant – to give timely, value-added marketplace insights and foresights.

Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.


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The supply/demand picture of agricultural playgrounds such as wheat, corn, soybeans, cotton, sugar, coffee, and cattle of course vary. Yet depending on the arenas and situation, fundamentals and price trends of a given agricultural commodity may substantially or increasingly intertwine with one or more other agricultural ones. The landscape of agriculture (though energy costs matter to it) is not typically viewed as the realm of energy. The fertile fields of so-called financial arenas like equities, interest rates, and currencies do not officially incorporate farming or energy. Nevertheless, agriculture is not an economic island entirely or even substantially separate from energy and financial provinces. Recent history underlines that the agriculture complex “in general” does not inevitably or always possess such independence. Not only traders in energy (and base and precious metals), but also foreign exchange, equity, and interest rate players, should monitor agricultural price levels and trends.

Governments and international organizations build numerous yardsticks to measure inflation. Not only do these indicators within a nation vary in the importance they assign to agricultural phenomena. Benchmarks between countries can differ, perhaps substantially. Picture a consumer price index of an advanced (industrialized; OECD) nation in contrast with one of a relatively poor developing country. Despite such variations, elevated and rising agricultural prices alongside similar patterns in the petroleum complex (and many metals) make it increasingly difficult for central bankers, finance ministers, and their political friends to claim that inflation levels will remain low. The withering of the United States dollar (broad, real trade-weighted basis; “TWD”) has assisted rallies in commodity prices.

The longer food- and other agricultural and energy prices- stay lofty, the more difficult it is to claim that so-called core inflation will remain (is) unaffected by them. Consequently, interest rate gatekeepers around the globe- even America’s stubborn Federal Reserve Board- face more and more pressure to boost policy rates.

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Agricultural Prices and Inflation (Desperate Housewives, Episode 8 )


Firms (and nations) obviously always need some inventory to keep their commercial and other economic wheels rolling. From the mid-1990s or thereabouts, arguably many industries reduced their desired level of inventory holdings. They fought to keep only enough supply around to satisfy expected demands “just in time”. The information revolution and other productivity advances encouraged this practice of edging toward some minimum (yet hopefully safe) operating level.

Has there emerged, or is there now appearing, another shift in desired holdings of commodity inventories in days coverage terms (not merely in absolute arithmetical levels)? Has there been a change from “just in time” to somewhat of a “just in case” bias? There’s no cultural bright line between “just in time” and “just in case”. Yet picture the just in case perspective as one of greater fears regarding marketplace risks, with consequently higher inventory holdings.

Commodities differ, but let’s focus on petroleum. In any event, one should ask to what extent the petroleum inventory orientation is mirrored in other commodity territories, especially for goods that consumers “have-to-have” like wheat and corn.

Whereas the Fed (and the US Treasury) can print more money, they cannot print more land, even with a weak dollar. And US agricultural land acreage arguably will not increase much, though perhaps sustained stratospheric prices will change that scenario.

Remember that a growing world population yearns to improve its standard of living. For many, that means eating more food in general and protein in particular. The US is not the whole world, but it is a crucial agricultural exporter.

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Desperate Housewives (Episode 4)- In the Commodities Corner