Perspective: Morning Commentary for April 21

By: Arlan Suderman, Chief Commodities Economist

Thu, 21 Apr 2022, 13:29

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 21 – Stock futures pushed higher overnight, supported by good earnings reports reflecting a resilient economy, while digesting the latest hawkish comments from the Federal Reserve. The VIX is trading near 20 this morning, reflecting relative calm on Wall Street. The dollar index is trading near 100.1 as it continues to slip lower from its recent two-year high. Yields on 10-year Treasuries are trading near 2.87% this morning. Crude oil prices are nearly 2% higher, while the Ags were mostly lower in early trade today.

First-time claims for unemployment benefits slipped to 184K in the week ending April 16, down from 186K the previous week, but notably above analyst expectations that it would fall to 175K. As such, the four-week moving average rose to 177.25K during the week, up 5K from the previous week. Continuing claims of those still searching for a job fell another 58K to 1.417 million in the week ending April 9, which is the lowest level for this key indicator since the week ending February 21, 1970, when continuing claims sat at 1.412 million. We continue to move closer to full employment, with more than 11 million job postings for this relatively small number of people searching for work, which continues to push wages notably higher.

The Federal Reserve finally got religion regarding inflation. We warned of the dangers of persistent inflation more than a year ago, but the Fed insisted that it was transitory – lasting a month or two. Acting at that point could have dramatically reduced the risks of more significant inflation, although it could not have totally eliminated it. Yet, a robust economy at the time could have managed inflation with fewer risks. Now the Fed is nearly in panic mode as it suddenly tries to convince the markets that inflation is enemy number one that must be dealt with quickly to avoid more significant consequences. Unfortunately, inflation has a tighter grip now than it did a year ago, and the economy is more vulnerable. Now some of the Fed’s most zealous doves are the most vocal hawks, speaking in recent weeks of the need to get aggressive. Those doves turned hawks would include Fed Governor Lael Brainard, San Francisco Fed President Mary Daly, and Chicago Fed President Charles Evans.

The doves are calling for the central bank to raise its benchmark rate to “normal” levels by year’s end. Some may argue regarding what “normal” rates are, but the message is clear. They want to see aggressive rate hikes this year. The market interprets that to mean that rates will increase by at least another 250 basis points over the next six meetings, with most of the hikes being at 50 basis points. There’s also an expectation that the Fed will decide next month to begin shrinking its balance sheet (withdrawing stimulus) at roughly $95 billion per month. Those are the numbers priced into the market currently, and it appears to have adjusted to that expectation. Now we need to see how the economy handles those unprecedented moves, if in fact that is what the Fed actually does.

Ukrainian farmers have planted more than 2.5 million hectares to spring crops thus far, which is 20% of the “expected” area, according to the Agrarian Policy and Food Department. It expects that 60 – 70% of those areas reclaimed from Russian troops can be planted, once they’re checked for land mines, etc. Just 30 – 40% of those areas that remain under hostile control are expected to be planted, including Luhansk, Donetsk, Zaporizhzhya, and Kherson oblasts. It continues to insist that most farmers purchased their required resources in advance, but we continue to believe that this is an optimistic outlook, with the availability of fuel, fertilizer, seed, and crop chemicals remaining limited. Farmers also face risks that Russian troops will return to destroy crops before they are harvested. Considering these conditions, the focus is on crops requiring the least resources, with little to no mention of corn planting to this point.

Ninety percent of Ukraine exports moved through its ports on the Black Sea, prior to the Russian invasion and blockage of ports. One-third of those shipments went to Europe, while two-thirds went to the Middle East, North Africa, and to Southeast Asia. Many of those countries had a 60- to 90-day food supply prior to the war. Current exports over land to the west total less than a tenth of the volume previously seen via the Black Sea, but they’re making progress. Shipments in the first 19 days of April totaled 320K metric tons, versus 415K for the entire month of March. This keeps global supplies tight, requiring that traders pay more attention to current dryness in the northern half of Brazil’s safrinha corn belt, as well as to planting delays in the U.S. Midwest and Northern Plains, along with the intense drought negatively impacting crop conditions in the Plains hard red winter wheat belt.

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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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