Perspective: Morning Commentary for April 4

By: Arlan Suderman, Chief Commodities Economist

Tue, 04 Apr 2023, 13:43

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 4 – Stock futures were cautiously higher this morning but concerns about inflation rearing its head again continue to limit gains. The VIX is trading near 19 this morning, which continues to reflect relative calm on Wall Street. The dollar index is trading near 102.1 at this hour, after dropping to an eight-week low below 101.8 earlier this morning. Yields on 10-year Treasuries are rallying to trade near 3.47%, while yields on 2-year Treasuries are trading near 4.02%. It’s the rallying Treasury yields that helped pull the dollar off its session low. Crude oil prices are 1% higher this morning, trading firmly above $81 per barrel, while the grain and oilseed sector is mixed in early trade.

Jobs will be the focus the rest of this week. We’ll get the JOLTS job posting report later this morning, which is expected to show 10.4 million job openings at the end of February. That was essentially the expectation a month ago as well, but the trade was surprised to see 10.82 million job openings, suggesting that the job market remains quite tight. The ADP private sector jobs report is scheduled for release tomorrow morning, with expectations that it will show that the economy created another 200K private sector jobs in March, which is still solid, but down from 242K the previous month. Weekly jobless claims data will be released on Thursday, with expectations that the number will remain relatively tight near 200K claims. The big government monthly jobs report is scheduled for release on Friday morning. It’s expected to show that the economy created a strong 240K jobs in March, although that’s down from 311K in February. However, it’s also expected to show that the unemployment rate remains very low at 3.6%, with average hourly earnings up 4.3% year-on-year.

The Federal Reserve will next meet on May 2 & 3 to re-evaluate its monetary policy. This week’s jobs data will weigh heavily in their assessment of current trends in wage inflation, which is ultimately their biggest obstacle currently to bringing down inflation to their 2% mandate. However, this week’s OPEC+ decision to further cut production will certainly be discussed as well amid projections that their move will risk crude oil prices topping $100 before the Fed meets again in June. The market is well aware of this, pushing the odds in Fed fund futures trading of another rate hike above 60% this morning, after essentially trading 50-50 odds of another rate hike at the end of last week. The market still expects 5% to be the Fed’s peak rate with this round of hikes, but the market hasn’t been right for the past year, so headline risks continue to be a risk for Wall Street.

U.S. Speaker of the House Kevin McCarthy confirmed his intentions to meet with Taiwan President Tsai Ing-wen tomorrow when she stops in California on her way back to Taiwan from her trip to Central America. McCarthy could not give the appearance that China had intimidated him to cancel the meeting, nor could Taiwan’s president do the same. But neither can China back down from its threats to give a strong response to the meeting. Both sides put themselves in a position of conflict from which they cannot back down without yielding authority to the other side. As such, the world now waits for Beijing’s response coinciding with tomorrow’s meeting, continuing the deterioration of the relationship between China and the West. This deteriorating relationship is, and will continue to be, a risk for future commodity trade between China and the United States.

Just 1% of the corn planted in China will contain genetically modified traits this year, according to anonymous industry experts who spoke on the sideline of a recent conference in China. This is a big disappointment to authorities who cleared GMO corn for mass planting this year amid hopes that China would be planting 90% of its acreage to GMO corn within five years. Trend yields in China are just over 100 bushels per acre, which is far below the 181.5 bushels per acre forecast by USDA for the U.S. crop this year. China advanced GMO technology this year in hopes of changing that, and thereby dramatically reducing its dependency on importing critical food commodities.

USDA reports that just 28% of the U.S. winter wheat crop is rated Good to Excellent as of Sunday, which is the lowest reading of the past four decades. The crop’s condition index score that considers all five condition categories is just 279 this week, which ties last year’s crop for the second lowest on record. USDA’s condition ratings go back to 1987. The poor winter wheat ratings are focused primarily on the Plains states, with the wheat-state of Kansas having the lowest condition score of just 230, down from 295 a year ago. The low ratings supported wheat prices overnight, especially with yet another major winter storm expected to add to the deep snowpack in the Northern Plains spring wheat belt over the next couple of days. Increased geopolitical risks with China led to profit taking in corn and soybean prices overnight, but the low wheat ratings combined with planting problems in the Northern Plains focus the trade on tightening global wheat supplies, providing support for the food grain. My world balance sheet continues to tighten in the year ahead for wheat, with the Ukraine war doing little to ease those concerns.

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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
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Renewable Fuels
Cocoa
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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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Energy
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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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