Perspective: Mid-Day Commentary for August 19

By: Arlan Suderman, Chief Commodities Economist

Fri, 19 Aug 2022, 15:08

Perspective: Midday Commentary

Arlan Suderman

Chief Commodities Economist

August 19 - Rate hike risks continued to haunt Wall Street this morning, with the tech sector leading the way lower for stocks. The VIX is trading near 21 at this hour, while the dollar index is trading at five-week highs above 108.1. Yields on 10-year Treasuries are trading near 2.99%. Crude oil prices are modestly higher, while the Ags are mixed. Wheat prices firmed on a technical bounce, while traders also monitor growing tensions surrounding Europe's largest nuclear plant in southern Ukraine. Corn prices firmed on crop concerns, while soybeans pulled back on spread trading, with traders thinking that the oilseed may be handling this month's weather better than corn, while also concerned about soft Chinese demand. Lean hog futures are following the product market lower in fund selling, while strong cash cattle prices support that market.

So, what is the size of this year's corn and soybean crop? That's the key question before the markets as we approach next week's Pro Farmer Midwest Crop Tour. That question takes a more challenging twist in light of recent years when the crop's seemed to weather adversity better than expected, thanks to modern seed genetics and technology. USDA currently forecasts the corn crop to come in a little below trend yields, with the soybean crop a bit above. That is expected to result in corn ending stocks declining to a 9.6% stocks-to-use ratio, while soybeans creep slightly higher to 5.4% of anticipated usage. Neither provides much margin for error. The market is skeptical that we will see a significant supply shortfall, but it will breathe a lot easier once the harvest verifies such.

Look for the crop tour to find some very good crops out there, while also finding some significant problem areas. That's fairly normal. The question typically revolves around how the two balance each other out. The crop tour should provide a better feel for that. However, as a former agronomist, the factor that has my focus this year is seed size. The crop tour will assume "normal" seed size when it calculates yields, for consistency purposes. The data shows that 52% of the Corn Belt has received 75% or less of normal rainfall this month thus far, with 34% receiving less than half of normal rainfall. Keep in mind that many of the areas seeing below-normal rainfall this month did so on already dry soils, as the pattern has largely been in place for some weeks. The dry bias is greatest west of the Mississippi, where 69% of the region saw 75% or less of normal rainfall this month, with 51% seeing less than half of normal rainfall and 19% at 25% of normal or less. That's the 8th driest August to this point since 1979 for the western Midwest. Furthermore, 97% of this region has seen above normal temperatures to this point - not extreme heat, but above normal. That combination would suggest smaller seed sizes overall for the corn crop, and the same "may" be true for soybeans as well IF the pattern holds over the next several weeks. Nearly a third of the eastern Midwest has also been dry this month, but temperatures have largely averaged near normal month-to-date. The graphic below shows the outlook for September as the crops move into maturity. The heat isn't extreme and it won't be totally dry, but again, the bias continues to favor smaller seed size, which shows up once the combines roll.

September temperature and rainfall outlook leans warm & dry for Ag Belt. SOURCE: ECMWF, WeatherBELL & Nutrien Solutions

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

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Perspective: Morning Commentary for August 3

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Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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