Perspective: Morning Commentary December 19

By: Arlan Suderman, Chief Commodities Economist

Fri, 19 Dec 2025, 14:21

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December 19 – It’s been a quiet night of trade in the equities, with a bit of a holiday feel to the markets. Traders are looking for that annually anticipated Santa Claus rally again this year, hoping that recent rate cuts by the Federal Reserve will help to facilitate that. However, their AI fears continue to plant some scattered doubts. The VIX did manage to slip closer to 16 overnight, reflecting relative calm on Wall Street as many traders begin to take extended time off for the Christmas to New Year holiday period. The dollar index is trading near 98.6 this morning. Yields on 10-year Treasuries are trading near 4.15%, as they bounce again following yesterday’s weakness, while yields on 2-year Treasuries are trading near 3.49%. Crude oil prices are modestly higher this morning as they continue to consolidate above $56 per barrel. The grain and oilseed markets generally drifted weaker in overnight trade.

The Bank of Japan raised its benchmark interest rate to 0.75% today, up 25 basis points from its previous level. What’s significant about that is that 0.75% is a 30-year high! That speaks volumes regarding the decades of a monetary policy mess that the central bank is now trying to correct – policy that left its economy stagnated for much of the past 30 years. The BOJ indicated that it is ready to continue raising rates in future meetings as it provided a slightly more upbeat growth outlook, and as it continues to battle inflationary pressures. The BOJ didn’t indicate a rush to raise rates in its comments, but it certainly did communicate a willingness. For years, Japan’s economy was held back by negative interest rates, which resulted in a flood of investment money traveling to the United States for positive returns, even when our rates were low. Some of that money is returning home now, although Japanese investment in our Treasury market went up another $10.7 billion in October, making it the largest foreign investor at $1.12 trillion. Japan last saw interest rates at 0.75% in 1995, when its economy was reeling from the burst of its asset-inflated bubble. That started a prolonged battle with deflation in Japan, which I would argue was enhanced by Japan’s negative interest rate that were designed to fight falling prices. A massive quantitative easing program was also ineffective at reversing the trend.

Ironically, Japan was the model that former Federal Reserve Chair Ben Bernanke followed when seeking a path to dig its way out of the Great Recession of late 2008. Bernanke was a student of the Great Depression, and he was determined not to see the next Depression happen on his watch. He was impressed by Japan’s model for monetary policy, and implemented much of it for the United States. The primary piece that we didn’t adopt was the negative interest rates. The Fed considered them, but a study done by the St. Louis Fed showed evidence that negative interest rates simply prolong the problem rather than correct the problem. Europe followed the U.S. Fed’s leadership of adopting the Japanese model during the Great Recession, as did many other central banks. Unlike the States, Europe did adopt the negative interest rates. The Japanese model fits well with Modern Monetary Theory that justifies infusing economies with massive amounts of fiscal and monetary spending, believing that inflation can be controlled by higher taxes for it to add to spending. That model eventually falls on its face, as we’ve seen, but many policymakers in Washington still believe deeply in it, as it gives them more power. As you can tell, I am not a proponent of MMT, believing that it has never, and will never, work over the long haul, but rather it creates more problems that increase the pain level when those problems eventually have to be fixed.

China held its third auction of soybeans from its reserve supplies, as it seeks to make room for the soybeans that its state buyers are purchasing from us to fulfill obligations under the handshake trade deal of October 30. China offers roughly 20 million bushels of some of the older soybeans held in its reserve each week. The first week saw crushers take nearly 80% of the soybeans offered. Nearly 63% of the total was taken in the second auction, while just less than a third was taken in today’s auction. Crush margins are poor currently, and crusher inventories of cheap Brazilian old-crop soybeans are high, with even cheaper new-crop supplies arriving starting in 60 days. Feed demand is weak as hog producers pare back herds due to weak margins. Analysts in China are growing in their confidence that China will purchase the 12 million metric tons (441 million bushels) committed to for this year, but actual shipment of the total will likely be spread out over the next eight months, or longer.

Soybean prices continue to leak lower amid skepticism that the Chinese soybean purchases will be sufficient to justify rationing demand with higher prices, when Brazil is on the cusp of another big harvest. This year’s crop looks to be another 350 to 400 million bushels larger than the last one. Meanwhile, corn prices remain in a sideways trading pattern, supported by robust export demand, but capped by ample supplies to fill that demand. Wheat prices are once again trying to find a bottom. Dryness continues to expand in the Plains hard red winter wheat belt, as well as in parts of Europe, but it’s difficult to sustain a rally on those factors ahead of the spring green up.

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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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

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