Perspective: Morning Commentary for April 28

By: Arlan Suderman, Chief Commodities Economist

Thu, 28 Apr 2022, 13:27

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 28 – Stocks again tried to rebound overnight, ahead of this morning’s U.S. GDP data for the first quarter, but traders remain concerned about next week’s anticipated Fed actions, along with the Chinese Covid-related lockdowns and the escalating war in Russia. The VIX dipped just below 30 late on Wednesday, although it’s back to trading around 30 following this morning’s data release. The dollar index put in a 19-year high above 103.9 this morning, while yields on 10-year Treasuries trade near 2.87%. The strong dollar and the elevated fear level seen in the VIX create more headwinds for the commodities, but some of them continue to have strong enough fundamental stories to hold their strength, making them even more appealing to fund managers looking for a hedge against inflation at 40-year highs. That’s not the case for crude oil this morning, which again shows modest losses, but most of the grain and oilseed markets managed to post modest gains this morning.

U.S. gross domestic product shrank at an annualized rate of 1.4% in the first quarter of this year, after growing by 6.9% in the previous quarter. Analysts had projected a modest 1.1% growth of GDP in the first quarter. As such, today’s headline GDP number is sobering, suggesting that the Fed finds itself looking squarely into the face of stagflation – a stagnant economy with high inflation. But the headline number may not be painting a true picture of what’s going on in the economy. I still believe that stagflation is a risk for our economy, but I don’t know that today’s data necessarily says that we’re there.

Today’s headline number slipped negative largely due to a wider trade deficit, which is a problem of its own, combined with a moderate pace of inventory accumulation. Retail inventories grew by 2.0% in March, according to data released yesterday, while wholesale inventories grew by 2.3%. That can be an indication of a slowdown in consumer buying, or it can reflect a more robust increase in production to build inventories for anticipated future sales. Recent business surveys give some credence to the latter. This morning’s data reported that first quarter personal consumption expenditures increased by 2.5% in the first quarter on an annualized basis. That was below analyst expectations of 3.4%, but it was a decent enough number that also matched growth in the previous quarter. Overall, consumer spending was solid in the first quarter, and business investment in equipment rose sharply, suggesting that businesses are not worried about the consumer pulling back purchases, but rather that they have a sense of optimism about the future. This morning’s weekly jobless numbers were also positive.

First-time claims for unemployment benefits slipped to 180K in the week ending April 23, down from 185K the previous week, and slightly below analyst expectations of 181K claims. Even so, the four-week moving average rose slightly to 179.75K claims, up from 177.5K the previous week. Continuing claims slipped by 1K to 1.408 million, which is a new 52-year low. As such, the employment numbers would also suggest that the economy is doing well. The Federal Reserve will balance the employment data with the above GDP data and considerable other data available to it when it reaches its decision on monetary tightening next week.

The broader trend remains steady to higher for the grain and oilseed sector, supported by a combination of solid supply and demand fundamentals and inflation play by fund managers taking advantage of those fundamentals. Headwinds are increasing with the dollar now trading at 19-year highs, and the VIX showing elevated fear levels. Yet, the market reflects solid demand with risk for more supply shocks in the weeks and months ahead. Soils continue to dry out across much of the northern half of Brazil’s safrinha corn belt as the crop moves through pollination and early grain fill. The monsoon season is coming to an end, reducing the opportunities for relief going forward. A major crop failure is not expected but updated private production estimates beginning to come out starting next week may start to show some declines. Further north, planting delays are mounting in the United States, with more of the same into early May. I still expect the crop to get planted, but the lack of early planting likely eliminates the opportunity for a larger-than-trend crop. China appears to be taking note of these risks as it steps up purchases, buying another 18.7 million old-crop and 24.1 million new-crop bushels overnight. This comes on top of this week’s record high canola and soyoil prices as Indonesia bans oil exports, spring wheat planting delays in the Northern Plains and deteriorating hard red winter wheat conditions in the central and Southern Plains. Wheat exports are limited to those countries that have a freight advantage, but that demand rationing may prove necessary if the current crop prospects continue to shrink.

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Perspective: Morning Commentary for August 12

August 12 – Today’s focus is on inflation, with the July consumer price index data out this morning. We have this, and one more month of data, ahead of the next Federal Reserve meeting. Of course, headlines from the Middle East and the Black Sea wars also have an ongoing influence on the markets. Stock futures posted gains this morning, while the VIX traded just below 15. The dollar index traded near 99.7. Yields on 10-year Treasuries are trading near 4.66%, while yields on 2-year Treasuries are trading near 4.18%. WTI crude oil is trading near $83, while Brent trades near $88 per barrel. The grain and oilseed markets rebounded from yesterday’s losses ahead of today’s highly anticipated WASDE crop report that is due out at Noon Eastern Time.

Arlan SudermanWed, 12 Aug 2026, 13:33

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

Perspective: Mid-Day Commentary for August 10

August 10 - Stocks traded quietly mixed to weaker through much of the morning as investors weigh Middle East war / peace headlines with artificial intelligence concerns / opportunities. Ironically, the VIX is trading near 15, putting it just barely above 2026 lows, despite the high level of geopolitical risks and AI concerns. The dollar index continues to consolidate largely between 99.5 and 100.0 after the late July break in what appeared to be Japanese central bank currency intervention. Yields on 10-year Treasuries are trading near 4.70%, while yields on 2-year Treasuries are trading near 4.24%. WTI crude oil is trading near $81 at this hour, while Brent trades near $87 per barrel on the geopolitical risks. The grain and oilseed markets are mixed ahead of Wednesday's big USDA WASDE crop report.

Arlan SudermanMon, 10 Aug 2026, 17:02

Grains & Oilseeds

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