What’s Up? What’s Down?

I can’t remember who gave me this idea, but sometimes I troll through the raw PPI data to get ideas on pricing power.  Here’s a list of the top 50 rising items in the PPI:

Code2011 Px IncreaseCommodity Name
WPU01130102

125.3%

Dry pinto beans
WPU01710802

109.8%

Checks and undergrades
WPU023307

90.7%

Liquid raw whey
WPU01130101

87.0%

Dry pea beans
WPU01130104

84.9%

Dry pink beans
WPU011301

84.1%

Dry vegetables
WPS017108

74.5%

Breaker stock and checks and undergrades
WPU01210105

71.3%

Hard amber durum wheat
WPU01710801

70.1%

Breaker stock
WPU01130215

68.4%

Lettuce
WPU01130103

68.0%

Dry great northern beans
WPS0181

64.5%

Alfalfa hay
WPU01830121

61.9%

Cottonseed
WPU01830111

45.2%

Peanuts
WPU02230101

44.9%

Haddock
WPU01830161

44.6%

Sunflower
WPU431105

41.7%

Other nonresidential buildings, gross rents
WPU4423

39.7%

Truck trailer, utility trailer, and RV rental and leasing
WPU06380304

39.6%

Calcium channel blockers and other vasodilators
WPU06220209

39.4%

Titanium pigments
WPU05320108

37.8%

Ethane, gas mixtures and other natural gas liquids
WPU02350303

37.3%

Bulk liquid milk products, including feed grade
WPU058103

37.0%

Other petroleum and coal products, including coke oven products, n.e.c.
WPU01190104

36.9%

Walnuts
WPS058

36.1%

Asphalt and other petroleum and coal products, n.e.c.
WPU058102

34.8%

Asphalt
WPU012201

34.5%

Barley
WPU01130105

33.3%

Dry peas
WPU021302

32.5%

Other milled rice and byproducts
WPU033701

32.5%

Greige cotton broadwoven fabrics
WPU06520136

32.5%

Urea
WPS065201

31.3%

Nitrogenates
WPU06520135

31.2%

Synthetic ammonia, nitric acid, and ammonium compounds
WPS0271

30.5%

Animal fats and oils, made in slaughtering plants
WPU07130371

29.8%

Flat rubber and plastics belts and belting
WPU02210126

28.3%

Boneless beef, fresh/frozen, inc. ground bulk/patty
WPU01710705

28.0%

Eggs, small
WPU0283

27.2%

Processed eggs, liquid, dried, or frozen
WPU01130404

27.0%

Round red potatoes
WPU06140341

26.8%

Ethanol (ethyl alcohol)
WPU067906

26.7%

Gum and wood chemicals, including wood distillation products
WPU0613020T

26.4%

Inorganic acids, inc. hydrochloric, sulfuric acid and other
WPU11490202

26.3%

Ball valves
WPU091502141

26.2%

Uncoated paper grocers’ bags and sacks
WPU091502142

26.1%

Uncoated paper variety bags and pouches (merchandise) and shopping bags
WPU58F101

26.1%

Automotive fuels and lubricants retailing
WPU013103

26.1%

Slaughter vealers
WPS0652

26.0%

Fertilizer materials
WPS013201

25.8%

Slaughter barrows and gilts
WPU01190101

25.8%

Pecans

A few notes:

  • Checks and Undergrades are chicken eggs of low grade.
  • Breaker Stock are eggs that are slightly better, but not good enough for retail.
  • Greige = Un-dyed
  • Vealers = Calves, used for veal
  • Barrows and Gilts = Hogs

When I look at the top 50 risers, I think the following are in demand:

  • Specialty hydrocarbons
  • Dried peas, beans, nuts, etc.
  • Fertilizer
  • Eggs
  • Some types of meat

Most of it boils down to a demand for food and energy.  These are very basic things, and to me indicate that there is demand for the basics.  I think this demand is global, as middle classes arise over much of the globe, food and energy will become more expensive.  A pity that the FOMC does not consider what people need to be material to their monetary decisions, despite the fact that food and energy have always had higher inflation rates, and there are better ways to deal with volatility (median, trimmed mean).

But what about the bottom 50?

Code2011 Px IncreaseCommodity Name
WPU1022

-10.7%

Primary nonferrous metals
WPU10230102

-11.3%

No. 2 copper scrap, including wire
WPS0292

-11.5%

Soybean cake, meal, and other byproducts
WPSSOP1300

-11.9%

Crude fuel
WPU01830131

-12.0%

Soybeans
WPU10250237

-12.1%

Copper and copper-base alloy sheet, strip and plate
WPU10250239

-12.2%

Copper and copper-base alloy pipe and tube
WPUID6222

-12.2%

Unprocessed fuel
WPSSOP1320

-12.3%

Nonmanufacturing industries
WPUID62222

-12.5%

Unprocessed fuel to nonmanufacturing industries
WPU022301

-12.7%

Unprocessed finfish
WPU0111

-12.9%

Fresh fruits and melons
WPU11510115

-13.6%

Portable computers, laptops, PDAs and other single user computers
WPU01130228

-14.2%

Green peppers
WPU10230101

-14.5%

No. 1 copper scrap, including wire
WPU11510114

-14.6%

Personal computers and workstations (excluding portable computers)
WPU441

-14.7%

Passenger car rental
WPU102102

-15.4%

Copper ores
WPU01110226

-16.8%

Cranberries
WPU091207

-17.1%

High grades wastepaper (pulp, substitutes & deinking)
WPUSI01102B

-17.1%

Berries
WPU01130212

-17.2%

Carrots
WPU02230502

-17.4%

Crabs
WPU01130226

-17.5%

Endive
WPU13710116

-17.6%

Other gypsum products
WPU012203

-18.1%

Oats
WPU06380105

-18.5%

Hormones and oral contraceptives
WPU084904

-19.3%

Sawn wood fence stock, wood lath, and contract resawing and planing
WPU0531

-19.3%

Natural gas
WPU091202

-19.5%

Mixed wastepaper
WPU01130222

-19.6%

Broccoli
WPU115202

-20.5%

Parts and components for computer storage devices
WPU01130223

-20.7%

Cauliflower
WPU01130211

-20.8%

Cabbage
WPU01210103

-21.3%

Soft white wheat
WPU01210104

-22.2%

Soft red winter wheat
WPU0912

-22.2%

Wastepaper
WPU09120801

-22.9%

Exports (all grades)
WPU02230131

-23.2%

Flounder
WPU01110109

-25.1%

Tangelos
WPU02230133

-25.4%

Pollock
WPS091203

-25.5%

Corrugated wastepaper
WPU01110101

-27.0%

Grapefruits
WPU01130216

-28.2%

Dry onions
WPU01130213

-31.3%

Celery
WPU01130234

-35.1%

Cucumbers
WPU01130218

-44.5%

Snap beans
WPU01130231

-44.6%

Squash
WPU011103

-64.2%

Melons
WPU01110301

-77.6%

Cantaloupes

One note: Finfish = real fish, as opposed to shellfish

When I look at the bottom 50 risers, I think the following are not in demand:

  • Melons
  • Many other fruits and vegetables.
  • Low grade paper
  • Some fish and shellfish
  • Copper and other base metals

PPI File 12-2011

The above file contains all of the data for all categories in the PPI report.  My view of the data tells this story, which is consistent with what I have been writing for the last eight years: Resources are in short supply relative to capital and labor, for the most part, but not absolutely.

I still think that energy is an investable theme, agriculture and fertilizer may be so also.