Perspective: Morning Commentary for April 8

By: Arlan Suderman, Chief Commodities Economist

Fri, 08 Apr 2022, 13:33

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 8 – Stock futures are mixed as traders position for the weekend focused on more sanctions on Russia and rapidly rising interest rates amid talk of the Fed withdrawing stimulus from the economy. The VIX is trading near 22 this morning, reflecting elevated concerns for the economy, but a lack of panic. The dollar index probed above 100.0 as we started the day for the first time in 22 months. Yields on 10-year Treasuries hit a fresh three-year high 2.73% this morning. The above supported money flow into the food and energy-based commodities as a hedge against rising inflation amid increasing talk among some analysts on Wall Street that the commodity bull may have plenty of energy left in him. Supplies of many of these commodities are tight, and the threats remain active and very real. Crude oil prices, along with grain and oilseed prices, traded modestly higher overnight.

The U.N. Food price index hit a record high in February, taking out the previous high from a decade earlier when high food prices helped initiate the Arab Spring. The index jumped another 13% in March from its February record, as food shortage fears rapidly spread following the Russian invasion of Ukraine. High food prices raise fears among government leaders around the world, leading them to alter policies to hoard supplies. They understand that high food prices create social unrest, which can topple governments in today’s social media world. But the hoarding of food tends to tighten supplies even more, creating fear among buyers that they will not get what they want or need. That’s the phase that the world currently finds itself in, and that it will likely continue to be in for much of this year, and possibly the next.

Another man-made food shortage is playing out in Shanghai, along with other cities in China currently in lockdown due to the Omicron variant of Covid spreading through the land. People living in China’s financial capital of Shanghai are struggling to get food as the city remains in a virtual lockdown due to Covid. Many food delivery workers are confined to their homes, or they choose not to work for fear of catching the virus. Private deliveries are banned in some areas of the city due to fear that those individuals could spread the virus. Residents are running low on food after the lockdown has gone on much longer than it was first scheduled. Government authorities are responding to the pleas for help by allowing some grocery stores to reopen, while encouraging delivery drivers to return to work. The next step in human psychology is stockpiling and hoarding as consumers seek to gather as much supply as they can to avoid a repeat.

Meanwhile, unrest continues to grow as stories circulate of babies and small children taken from their parents who may have tested positive, with the children then being taken to over-crowded facilities that lacked sufficient staffing for caring for the children. The above occurs with increasing frequency as tens of thousands of people test positive each day with no visible symptoms, but they are still subject to the same quarantine requirements. Shanghai is a major export terminal for goods produced in China, but truck volume to move goods to the ports is running just 15% of normal, adding to global supply chain problems. This is largely a product of China’s zero-tolerance policy toward Covid-19, but it probably feels that it has few alternatives due to the lower effectiveness of its vaccines and its lessor developed healthcare system.

Mixed messages continue to flow out of Ukraine, and that’s normal in the fog of war. The Ministry of Ag recently stated that this year’s production will be roughly half of normal due to the challenges created by the Russian invasion of Ukraine, but it made no mention of exports. We considered that an optimistic outlook. Today, the Ukraine government stated that production will be down by 20% this year, and we consider that extremely optimistic. Other data today revealed that Ukrainian Railways moved 924K metric tons of grain in March. Of the total, 416K mt were moved for export. However, just 222K mt moved across Ukraine’s western border in March, while the remainder moved toward the ports to hopefully be exported once the war has ended.

USDA will release its April WASDE crop report at 11 a.m. Chicago time today. Few surprises are expected, and hopefully that will be the case. Corn and soybean crop ratings dropped notably in Argentina this week as the harvest progresses, so we could see downward adjustments in production there. Brazil’s soybean crop should also shrink. It’s corn crop should be flat, to a bit higher, but this may be the highest corn number we see going forward, as a dry pattern has set up for pollination and early grain fill in Mato Grosso and surrounding areas. The above adjustments could result in modest increases in U.S. exports, but we could very easily see USDA wait to make more significant changes until the May 12 report, when it will also add in its first look at the 2022-23 domestic and global balance sheets. That report will be one of the most significant of the year, as it should provide the biggest indications to date of the impact of the Ukrainian war on global food supplies. I anticipate that USDA will give Ukraine the benefit of the doubt, taking it at its word that it will be able to produce and export grain in the year ahead, but that may be the most optimistic outlook that we see going forward as the reality of war plays out amid mounting shortages of food and fertilizer.

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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

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

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

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

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

Grains & Oilseeds

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