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Perspective: Mid-Day Commentary for July 17

By: Mike Castle, Market Intelligence - Fertilizer Analyst

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July 17 – Stocks have recovered from their morning lows but remain in the red at midday, with the tech-heavy Nasdaq still leading the way down as it trades 0.8% lower at the time of writing. The VIX remains up roughly 7% on the day to hang around 17.9 at the time of writing, though it is off notably from the three-week high of 19.50 seen earlier in the session. The dollar is trading almost right at unchanged at midday, currently around the 100.75 level. Treasuries are quietly mixed, with 10-year yields slightly in the red just above 4.54% and 2-year yields slightly in the green trading just above 4.17%. Crude oil remains elevated amid the ongoing escalations between the U.S. and Iran, with risk premium coming in ahead of the weekend’s market closure, as nearby WTI current trades up 2.5% on the day near $81.60 and nearby Brent trades up 4.4% on the day near $88.00. The grains and oilseeds are widely higher, with the return of Chinese purchases to the U.S. and the ongoing escalation between Russia and Ukraine impacting shipment through the Black Sea keeping a bid under the market, though the cattle complex continues its recent ugly selloff.

USDA’s flash reporting system showed nearly 707k metric tons of new crop (2026/27) soybean sales in this morning’s update, with the bulk of the total, 340k metric tons (~12.5 million bushels) explicitly to China, 256.6k metric tons (~9.4 million bushels) to Mexico, and the remaining 110k MT (~4.0 million bushels) to unknown destinations. This is the largest single day of USDA reported soybean flash sales since November 2025 and the largest single day of next marketing year soybean flash sales since July 2023. As of yesterday’s export sales report for the week ending July 9th, cumulative 2026/27 soybean sales sit at 169 million bushels, their largest at this time since 2022. Amid the backdrop of record crush demand in the new era of soy-based biofuels, the resumption of large-scale Chinese purchases become more impactful. At this point, we are by no means seeing unprecedented levels; if anything, it’s more like returning to “normal,” albeit a bit early. However, the weeks ahead are typically where we see our strongest period of new crop export sales. If we continue to see evidence of China taking concrete steps to get anywhere close to their alleged 25 million metric ton (~919 million bushel) purchase agreement, we could be looking at a significantly tighter U.S. soybean balance sheet.

June housing starts blew past expectations, coming in at a seasonally adjusted annualized rate of 1.427M, sharply above the average estimate of 1.310M as well as the top-end estimate of 1.380M. This represents a whopping 19.0% month-on-month increase, the largest seen since May 2023. Interestingly, all of this strength came from multi-family starts, surging 76.3% month-on-month, albeit looking a bit exaggerated given the plunge in the month prior, while single-family starts actually fell 0.2% month-on-month. Meanwhile, building permits fell 3% month-on-month to a seasonally adjusted annualized rate of 1.367M in June, below the average estimate of 1.400M and a three-month low, likely a reflection of higher mortgage rates and rising inventories of unsold homes.

U.S. consumer sentiment rebounded sharply in July, according to University of Michigan’s preliminary report released this morning. Headline consumer sentiment jumped to 54.4, up sharply from the 49.5 seen in June and well above expectations of a much more moderate rebound to 51.0; this was also the best headline consumer sentiment reading since February, prior to the war with Iran. Unexpected strength was seen in both current conditions, surging higher to 54.9 after sitting at 47.7 in the month prior, also sharply above expectations of remaining at a relatively ugly 48.7, as well as in future expectations, rising to 54.0 from the 50.7 seen in June and well above the expected 51.7. Year-ahead inflation expectations dropped as well, with one-year seen at 4.2%, down from 4.6% in June and the lowest since March. Five-year inflation expectations held steady with June at 3.3%, though still a notable improvement from May’s 3.9%.

More than 70% of these responses were received prior to the resumption of strikes on Iran, however, so we’ll need to take these numbers with a grain of salt. University of Michigan releases two of these reports though, with today being considered preliminary and the upcoming release on July 31st that will represent the final July numbers. It will be very interesting to watch how these attitudes shift in that time, as we’ll most likely see sentiment sour and inflation expectations rise, but a major portion of that will be how the escalations between the U.S. and Iran play out during that span.

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Perspective: Mid-Day Commentary for July 17

July 17 – Stocks have recovered from their morning lows but remain in the red at midday, with the tech-heavy Nasdaq still leading the way down as it trades 0.8% lower at the time of writing. The VIX remains up roughly 7% on the day to hang around 17.9 at the time of writing, though it is off notably from the three-week high of 19.50 seen earlier in the session. The dollar is trading almost right at unchanged at midday, currently around the 100.75 level. Treasuries are quietly mixed, with 10-year yields slightly in the red just above 4.54% and 2-year yields slightly in the green trading just above 4.17%. Crude oil remains elevated amid the ongoing escalations between the U.S. and Iran, with risk premium coming in ahead of the weekend’s market closure, as nearby WTI current trades up 2.5% on the day near $81.60 and nearby Brent trades up 4.4% on the day near $88.00. The grains and oilseeds are widely higher, with the return of Chinese purchases to the U.S. and the ongoing escalation between Russia and Ukraine impacting shipment through the Black Sea keeping a bid under the market, though the cattle complex continues its recent ugly selloff.

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