Perspective: Morning Commentary for August 12

By: Arlan Suderman, Chief Commodities Economist

Tue, 12 Aug 2025, 13:38

Today's Perspective Video: Trump's Social Post Spurs Commodity Speculation

August 12 – Inflation is the focus this morning, with the release of the July consumer price data. Stock futures rallied on the data release, while the VIX slipped lower to trade near 15, as investors anticipated higher odds of a rate cut by the Federal Reserve next month. The dollar index traded near 98.4, Yields on 10-year Treasuries dropped on the inflation data, but recovered again to trade near 4.30%, while yields on 2-year Treasuries are trading near 3.75%. Crude oil prices were soft once again this morning, consolidating below $64 per barrel, while the grain and oilseed sector was under pressure ahead of today’s big USDA WASDE crop report.

The headline consumer price index rose by just 0.2% month-on-month in July, matching analyst expectations, and down from 0.3% in June. The headline CPI rose 2.7% year-on-year in July, down from analyst expectations of 2.8%, but matching the pace posted in June. The core CPI that excludes the more volatiles food and energy sectors rose 0.3% month-on-month in July, matching analyst expectations, but up from 0.2% the previous month. The core CPI rose 3.1% year-on-year in July, up from analyst expectations of 3.0%, and up from 2.95 the previous month.

Declining energy prices continued to hold down the headline inflation numbers, although they continue to hold above the Federal Reserve’s 2% target. But keep in mind that Federal Reserve Chair Jerome Powell stated at his press conference in late July that his primary data focus now regarding making a rate cut is the employment data, as long as inflation remains in its current range. Today’s inflation numbers would appear to do so, even though they remain above the mystical 2% target. As such, the focus continues to be on the poor July employment report – especially the backward revisions in the May and June data.

Today’s inflation data continued to show just modest inflationary pressures from the products impacted by President Trump’s tariffs. But the greatest inflationary pressure came from fuel oil (up 1.8% on the month), Transportation services (up 0.8% on the month), and medical care services (up 0.8% on the month). That was partially offset by a 2.2% monthly decline in gasoline prices, followed by a 1.9% decline in energy commodities, and a 0.9% decline in natural gas prices. Food consumed away from home rose by 0.3% on the month, led specifically by full service meals rising 0.5% on the month. Dental services rose 2.6% on the month in July, leading medical services higher, while airline fares rose 4.0% on the month, leading transportation services higher. Nonetheless, CME Fed funds futures are trading 94% odds of a September rate cut this morning, up from 86% yesterday, with 57% odds of three rate cuts by December, up from 45% yesterday.

President Trump signed off on another 90-day suspension of the high reciprocal tariff rates on China on Monday afternoon. There had been a glimmer of hope that we might see a commodity trade deal with China announced yesterday, but I would argue that the new 90-day suspension likely confirms that we’re not close to such a deal. Trump urged China in a social media post Sunday night to quadruple its purchases of U.S. soybeans. Then when asked on Monday about whether he would extend the expiring suspensions, he responded that “we’ll see what happens.” However, he extended the suspension another 90 days a short time later. Meanwhile, China continues to shun U.S. Ag and energy commodities for the most part, although it is buying some U.S. pork. There continues to be zero bushels of soybeans on the books for Brazil at this point as we approach the traditional active shipping period as the soybean harvest gets started next month. Sales to “unknown destinations” are extremely low as well, suggesting that we’re not likely seeing sales to China hidden there either. We are seeing strong old-crop sales as Chinese demand dominates Brazilian ports, pushing Brazil basis higher. That sends other customers to U.S. shores, but it can’t offset the lost China new crop business if China elects to stay away from the U.S. market this year.

USDA will release its big August WASDE crop report at Noon Eastern Time today. The primary focus will be on USDA’s corn and soybean yields for the current crop. These yield estimates will be the first of the year provided by the NASS statistical division of USDA, but it will not be based on actual field sampling. Instead, the estimate will be based on farmer surveys, crop condition ratings, and on satellite data. The first field sampling for developing yield estimates will come next month. The average pre-report trade guesses expect USDA to peg the corn crop at 184.4 bushels per acre, with soybeans coming in at 52.9 bpa, up from 181.0 and 52.5 bpa respectively in July. I believe that the “whisper” number factored into the corn market is likely higher – perhaps in the upper 180s bpa. As such, it may be possible that the market would be more surprised by a lower number than a higher number today if I’m right. Then the trade will look for confirmation as field scouts cross the Midwest next week sampling fields in the Pro Farmer Midwest crop tour.

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Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

Mike CastleFri, 07 Aug 2026, 13:26

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Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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Perspective: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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