Perspective: Mid-Day Commentary for July 8

By: Arlan Suderman, Chief Commodities Economist

Fri, 08 Jul 2022, 15:35

Perspective: Midday Commentary

Arlan Suderman

Chief Commodities Economist

July 8 - Stocks recovered their overnight strength as traders moved past concerns raised by this morning's monthly jobs report. A modest "risk-on" environment provided support as fears ease on Wall Street, with positive money flow generally focused on the food and energy commodities as well. The VIX dipped to a fresh one-month low below 25 this morning as those fears began to evaporate. The dollar index slipped lower to trade near 106.9. Yields on 10-year Treasuries are trading near 3.09%. Crude oil prices are roughly 2% higher as we approach midday, while the grain and oilseed markets move impressively higher.

Wheat again is the leader to the upside today, as gains of 5% or more have been seen this morning. The recent long liquidation was overdone relative to the supply and demand fundamentals - something that was not missed by end users and speculators alike. They're now racing to rebuild ownership at what they consider to be "bargain" prices following the recent collapse, with momentum-trading Algo computer trading amplifying the move higher, just as they did the opposite during the liquidation phase. Supplies of milling quality wheat still remain snug in the world as we harvest a drought-shortened crop in the U.S. Plains, much of Ukraine wheat remains locked in there due to the closure of its ports, and now drought threatens Argentina, as well as portions of Europe. Corn and soybean prices are also rebounding sharply for similar reasons. However, they also face increased weather risks as the forecast maps turn notably drier for much of the remainder of July beyond this week's rains. Heat may also be a factor as well, although western areas of the Corn Belt will face higher risks for heat than eastern areas.

Several key global areas of crop production remain at risk over the next several months, based on the European ECMWF seasonal forecast seen below. Keep in mind that this forecast is based on data that tells the models that La Nina will remain in place through the end of the year. The below forecast changes dramatically if that changes. Nonetheless, take note of the expectation that drier trends are expected for the Plains and Midwest west of the Mississippi River through September. Also note expectations for drier trends to remain in tact for key crop production areas of European, while Argentina, Uruguay, Paraguay and much of southern and western Brazil lean dry as well. Australia sees good moisture, which is typical for La Nina this time of year, while key corn and soybean producing areas of China see above normal rainfall where heavy rains have already been a threat to crop production. The below forecast also suggests increased tropical activity in the Caribbean and Gulf of Mexico, as well as off the East Coast of the United States. The bottom line is that key production areas of the world face ongoing weather risks at a time when global supplies remain snug, and the war is continuing in Ukraine.

Global seasonal forecast highlights areas of concern. SOURCE: ECMWF, WeatherBell, & Nutrien

Grains & Oilseeds

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Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

Grains & Oilseeds

Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

Mike CastleFri, 07 Aug 2026, 13:26

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