Perspective: Mid-Day Commentary for October 7

By: Arlan Suderman, Chief Commodities Economist

Tue, 07 Oct 2025, 17:00

Today's Perspective Video: Government Shutdown, OPEC Moves & China Trade Hopes

October 7 - Both the S&P and Nasdaq stock indices briefly hit fresh record highs this morning, before turning lower again, while gold prices hit new record highs as well. The markets continue to operate in the blind in the absence of government data due to the week-long partial shutdown, but optimism of more Federal Reserve rate cuts offset growing government uncertainty. Uncertainty in French and Japanese governments combine with the U.S. shutdown to support gold prices, with additional support from ongoing Chinese buying of the precious metal. The VIX firmed above 17 as stocks came off their highs, while the dollar index firmed to trade near 98.4. Yields on 10-year Treasuries are trading near 4.12%, while yields on 2-year Treasuries are trading near 3.57%. Crude oil prices are mixed to weaker, while the same is true for the grain and oilseed sector as well.

President Trump reportedly held a lengthy phone conversation with Brazil's President Lula on Monday. Tensions between the two countries have been high since Trump imposed a 50% tariff on Brazilian products entering the United States this summer. The call received little press in the United States, but it was reported more extensively in Brazil. The call was reportedly very positive and constructive from the Brazil standpoint. My sense is that President Trump needs to remove uncertainty from the U.S. economy ahead of the 2026 mid-term elections. Doing so could unleash the U.S. economy at a time when M2 money supply is essentially record large, and the incentives of the recently passed tax bill are in place to encourage corporate expansion. The question is, is that within Trump's DNA to unwind the uncertainty? The Brazil issue may provide some insight into that. Resolution of our differences with Brazil could increase China's difficulty in leveraging the BRICS coalition against the West. It could also lead to resolution of our differences with Canada as well, and I already anticipate a trade deal with Mexico. Reaching an agreement with India might be a bigger challenge considering its purchases of Russian crude oil, but that's in the realm of possibilities as well. But I think that Trump's handling of Brazil may provide insights into whether he will restore certainty to the U.S. economy as we move into 2026.

Reaching a trade deal with China would contribute to that certainty, but I don't think it is essential to do so to restore certainty to the U.S. economy. Failure to reach a deal with China will continue to negatively impact the U.S. Ag sector, but not necessarily contribute significantly to fears of the U.S. consumer or broader corporate world. Nonetheless, that still leaves U.S. agriculture facing many questions. The U.S. biofuel program is expected to support strong demand for feedstock, but the partial government shutdown likely delays final work on that, leaving those questions unanswered possibly into this winter. U.S. corn remains quite competitive on the global market, supporting strong exports, as shown below. In fact, the current sales pace suggests that we may still add to USDA's record projections. Wheat export sales are also at 12-year highs - at least they were prior to the shutdown.

But the lack of clarity on biofuel policy and the loss of Chinese business continues to build storm clouds above the soybean balance sheet. USDA's September balance sheet showed U.S. soybean exports this marketing year at 1.685 billion bushels, down from 1.875 billion last year due to "increased competition" from other countries, such as Brazil. The average Chinese commitments by this week of October over the past three years was 412 million bushels of U.S. soybeans, accounting for 22% of total sales to all destinations over those three years. A similar ratio this year would suggest that we would already have 375 million bushels on the books to China, but right now it is zero. USDA's target has to drop short of a blockbuster deal soon.

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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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