Perspective: Morning Commentary for August 1

By: Arlan Suderman, Chief Commodities Economist

Mon, 01 Aug 2022, 13:35

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

August 1 – Stock futures pulled back a bit overnight from their recent run that saw values bounce notably from mid-June lows. Poor economic data from China raised concerns about this week’s U.S. economic data. Traders are also keeping an eye on House Speaker Nancy Pelosi’s trip to East Asia. Taiwan was not on her travel itinerary released over the weekend, although many observers still expect her to do at least a touch and go stop in Taiwan in the days ahead. That would be expected to trigger a response from China’s military, but not likely the kind that would escalate a military conflict with the United States. The VIX bounced to trade near 23 this morning, after falling to a fresh three-month low near 21 on Friday. The dollar index is trading near 105.4 this morning, after posting nearly four-week lows earlier in the session. Yields on 10-year Treasuries are trading near 2.63%, while yields on 2-year Treasuries are trading near 2.90%. Crude oil prices are 5% lower on China’s disappointing economic data, and ahead of this week’s OPEC+ meeting. The Ags are lower as well, participating in the broader commodity sell-off, as well as reacting to the first cargo of grain to leave a Ukraine port since the war started in February.

China’s official manufacturing purchasing managers index (PMI) fell to 49 for July, surprising market participants with a lower-than-expected reading that indicates contraction among that nation’s small and mid-sized firms. The July number was down from 50.1 in June, and below analyst expectations that it would show modest expansion at 50.4. Analysts expected that the July number would be better, since many areas of China were trending toward opening up more than they had been for several months as Covid numbers remained somewhat under control. Yet, the lingering flare-ups and the resulting restrictions negatively impacted consumer demand. The employment index component fell for the fourth consecutive month in July, while new order growth slowed as well. Meanwhile, housing prices continue to fall notably lower in China as well, raising concerns over the health of the property sector, that makes up a fifth of China’s economy. More details on China’s economic challenges can be found in China Direct, published by our Shanghai office each day.

The first load of Ukrainian corn left Odessa port this morning since the start of the war on February 24. Another 16 ships are said to be ready to leave shortly in a caravan if this first shipment goes well. The first load that left this morning is headed to the port of Tripoli in Lebanon carrying 26K metric tonnes of corn. Ukraine hopes that the recently signed agreement will allow it to increase income for its war-ravaged economy by at least $1 billion. That is something that has not been overlooked by Russia, and that is very much contrary to what Russia wants to see happen. Keep in mind that Russia still has the upper hand in the region. Many people will argue that. I would agree that progress has been much more challenging than Russia expected, but it is still the aggressor, and it still has the greater resources in the region. Don’t expect it to sit idly by while Ukraine garners $1 billion from trade through its ports that it can use to fund its defense efforts. This first shipment of corn is being blamed for this morning’s weakness in the grain and oilseed markets, and it certainly is a factor. But that’s also within a context of a selloff in the broader commodity sector as well, which may even be the greater factor.

Little has changed in the August weather outlook from what we expected when we left on Friday. Yes, there’s more rain in the outlook for the eastern Midwest as the forecasts progress forward, but that was expected. High pressure over the Central Plains is still the dominant feature. The models always tend to try to migrate that high to the west this time of year, and it may do so from time to time. The heat is expected to ebb and flow in the Plains – impacting Iowa at times. Rainfall is expected to remain below normal with high evapotranspiration rates west of the Mississippi River. Multiple reports of corn being chopped for silage are already being heard in Kansas and Nebraska. However, this is not considered to be a pattern that would result in a failure of the national crop, nor do I expect it to result in significant reductions for the August estimates.

StoneX expects to release its first monthly production estimates Tuesday afternoon, utilizing its proven customer survey process. That should be the first of many private production estimates to be released over the next 10 days ahead of USDA’s estimates to come out on August 12^th. Keep in mind that USDA resurveyed farmers in Minnesota and in the Dakotas last month about their planted acreage. I am looking for a reduction in national corn acreage of 450K in next week’s report as a result, with a very modest increase in soybean and spring wheat acreage. I’m still anticipating the possibility of an eventual 2% - 5% national yield reduction if the forecast verifies.

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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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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

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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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