Perspective: Morning Commentary December 23

By: Arlan Suderman, Chief Commodities Economist

Tue, 23 Dec 2025, 14:36

Today's Perspective Video: EPA Delays Final Biofuel Regulations - Commodity Implications

December 23 – Stock futures turned lower following the release of this morning’s economic data, which cast doubts on the odds of the next rate cut from the Federal Reserve. Yet, the VIX continues to trade near 14, after posting a new one-year low there yesterday, while the dollar index firmed from a fresh 11-week low below 97.9. Yields on 10-year Treasuries rallied to trade near 4.20% following the data release, while yields on 2-year Treasuries trade near 3.55%. Crude oil prices are mixed following yesterday’s big gains as geopolitical risks rise ahead of the holiday break, while the grain and oilseed markets were mostly firmer.

The headline number for durable goods orders saw a 2.2% decline on the month for October, which was worse than the 1.5% decline anticipated by analysts, while the prior month number was revised up two ticks to 0.7% gains. But durable goods excluding transportation rose 0.2% on the month in October, beating analyst expectations of 0.1% gains, although down from 0.7% gains the previous month. Core capital goods orders are generally seen as a measure of business sentiment. They rose 0.5% on the month in October, although that was down from 1.1% gains in September. Overall, these are solid numbers for October, although not for the more volatile transportation sector, and certainly not reflecting robust growth.

Gross domestic product is how we measure growth – or the lack thereof – in our economy. GDP grew at a strong 4.3% annual rate in the third quarter, according to today’s preliminary data. That’s stronger than the 3.2% growth expected by analysts, and certainly stronger than the 3.8% growth seen in the second quarter. Personal consumption expenditures rose at a 3.5% annual rate in the third quarter, beating expectations of 2.7%, and up from 2.5% in the second quarter. Both of the above numbers were well above the highest of the pre-report estimates by analysts. The Bureau of Economic Analysis noted that the big increase in third quarter GDP was a product of increased consumer spending, exports, and government spending, which was partly offset by a decrease in investment. Imports are normally a subtraction in the calculation of GDP, but imports declined during the quarter.

The “experts” will point out that this data was prior to the partial government shutdown in October, so they’ll be looking for lower numbers for this quarter. Nonetheless, this supports my assertion that the soft labor problem is not due to a structural problem within the economy so much as it is due to the “uncertainty” created by President Trump’s volatile policy stance – where tariff announcements, etc. are constantly changing. As such, I have argued that the Federal Reserve’s rate cuts will not make a difference on employment, but rather the best thing for employment would be for Trump to remove his policy uncertainty, which I see him starting to do ahead of next year’s midterm elections. The risk then is that his removal of uncertainty – if that is indeed in his DNA – stimulates the economy, added by significant stimulus measures in the “One Big Beautiful Bill” that take effect January 1, combined with record high M2 money supply, which overstimulates the economy in 2026. As such, investors saw this morning’s data working against their hopes of another rate cut anytime soon from the Federal Reserve.

Trade tensions continue to rise between China and the European Union. President Trump reached an agreement with President Xi on October 30 to allow some rare earth mineral flow to non-defense industries in the United States, but the EU still lacks such an agreement. Furthermore, the EU’s anti-subsidy tariffs targeting Chinese electric vehicles angered China, resulting in China imposing anti-dumping tariffs on EU pork and products with rates ranging from 5% to 20% earlier this month. Now China has slapped anti-subsidy tariffs on dairy products coming from the EU as well, ranging from 21.9% to 42.7%, starting today. Dairy producers in France, Italy, the Netherlands, and Denmark are expected to be hit the hardest. The anti-dumping probe leading up to today’s actions already had seen European cheese exports to China fall by 15% from the previous year’s pace in the first eight months of 2025.

USDA continues to catch up with releasing export sales data following the partial government shutdown earlier this fall. It released export sales data this morning for the week ending December 11. It revealed that exporters sold 68.7 million bushels of corn during that week, along with 89 million bushels of soybeans, 16.2 million bushels of wheat, and 9.9 million bushels of grain sorghum. Japan was the featured buyer of US corn during the week at a net 13.9 million bushels, followed by South Korea at 10.4 million and Mexico at 9.6 million bushels. Marketing year-to-date corn export sales to all destinations now exceed the seasonal pace needed to hit USDA’s record high target by 270 million bushels. China was the featured buyer of US soybeans during the week at a net 50.8 million bushels, bringing confirmed sales to China for the current marketing year to 6.066 million metric tons, or 223 million bushels. Our sources suggest that number is closer to 8.7 mmt currently, of the promised 12 mmt.

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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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Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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Perspective: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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