Perspective: Morning Commentary December 12

By: Arlan Suderman, Chief Commodities Economist

Fri, 12 Dec 2025, 14:35

December 12 – Stocks were mixed in relatively quiet trade once again overnight, with the Dow trying to build on Thursday’s run to record highs, while the Nasdaq continues to struggle under the weight of Oracle’s disappointing outlook. Yet, the markets also have that typical December malaise feel, as they struggle to find significant momentum. Even so, the VIX remains low, below 15 this morning, while the dollar index bounces off yesterday’s two-month low to trade near 98.5. Yields on 10-year Treasuries are trading near 4.19%, while yields on 2-year Treasuries are trading near 3.55%, as the yield curve expands. Crude oil prices are modestly weaker this morning, while the grain and oilseed sector also traded mostly weaker overnight. China announced another auction of soybeans out of its reserves, while buying more U.S. soybeans to replace the auctioned soybeans. USDA announced flash sales of another 4.9 million bushels of soybeans to China this morning, along with 9.8 million bushels of corn to “unknown destinations,” and 104,328 metric tons of soybean meal to Mexico.

China’s Central Economic Work Conference concluded yesterday with some notable points of emphasis highlighted for growing that country’s economy. The overall theme of the conference was, “Stability, Consumption and Innovation-Driven.” That means that China wants to stabilize its economy, continue its efforts to shift toward a consumer-driven economy versus the current export-driven economy, doing so with a focus on technology innovation. Policy makers pledged that they will be more proactive utilizing fiscal policy amid a moderately accommodative monetary policy to implement the goals established in the 15^th Five-Year Plan developed by party leaders in late October. That means further expanding deficit spending via government bonds to keep factories operating, consumers buying, and to support debt swaps with local governments to facilitate policy support. China officially operates with a 4 – 4.5% deficit – lower than the U.S. 6 – 7% - although there is debate over how China calculates that deficit, putting more of the debt on local governments.

China will continue its efforts to stimulate consumer spending amid the loss of export demand from the West, although that is difficult to do when a deteriorating property market keeps consumer confidence in negative territory. Stimulus programs encouraging consumer trade in programs and subsidized purchases lost some of their impact late in 2025. The conference report remained vague on how authorities plan to build a strong domestic market. Nonetheless, substantial consumer subsidies are expected to remain a tool of choice in 2026. Policymakers will need to show innovation in finding new ways to stimulate consumer buying based on their evolving needs, while seeking to enhance their experiences. Much of the wealth of China – like the United States – is with the elderly, so that will be a target for stimulating spending. China will also focus on developing a new real estate model to boost property values in hopes of restoring consumer confidence in the economy. That’s a challenge with a declining population, with Fitch Ratings calling for an additional 15% decline in home sales over the next two years.

Much of the money flow is expected to target artificial intelligence, bio-manufacturing, and commercial aerospace, including low altitude transportation technology. Electric vehicles, robotics and battery technology will also be an ongoing focus for domestic investment. The above will support a push for consumption of green energy, with implications for rare earth minerals and magnets, as well as industrial metals. That will likely cool growth demand for fossil fuels, while supporting demand for industrial metals such as copper, aluminum, and lithium. China already has the virtual monopoly on the world’s supply of processed rare earth minerals – at least until the United States can rebuild its niche in the industry in the years ahead. Food security will also remain a priority, with China seeking to maintain large reserves of the food-based commodities.

What is the “neutral” interest rate for the U.S. economy that is neither stimulative nor restrictive? The Federal Open Market Committee of the Fed believes that it is near 3%. I’ve previously stated that I think it is north of 4%. Why do I think so? Keep in mind that I’m a commodity guy, so take this with a grain of salt. But here is my rationale. First, I believe that the Fed has been biased by the behavior of recent years when interest rates were artificially held low, supported by a highly regulatory environment that restricted economic growth, leading them to misinterpret the impact of those rates. Second, the economy remains very resilient, despite the uncertainty holding back both the consumer and businesses, tied to how Trump conducts business. I believe that we would be looking at something closer to 4% GDP growth with current interest rates with the stimulus factors currently in place if it were not for that “uncertainty factor” that is holding things back. Look at the growth that we had following the tax cuts in Trump 1.0, prior to the pandemic dramatically changing things with a ton of new regulations coming in during that period to hold things down. Many of those regulations are now being removed once again.

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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.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

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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