Perspective: Morning Commentary for August 29

By: Arlan Suderman, Chief Commodities Economist

Fri, 29 Aug 2025, 13:35

August 29 – This morning’s Personal Consumption Data provided few surprises for Wall Street, although stock futures remained under modest pressure as we prepare to go into a three-day holiday weekend. The markets will be closed on Monday for the Labor Day holiday. The VIX is trading below 15 this morning, while the dollar index is trading near 98.1. Yields on 10-year Treasuries are trading near 4.23%, while yields on 2-year Treasuries are trading near 3.64%. Crude oil prices traded modestly weaker overnight, while the grain and oilseed markets had a mixed to lower tone as well.

Personal income rose 0.4% month-on-month in July, up from 0.3% in June, but matching analyst expectations. Personal consumption expenditures rose 0.5% month-on-month in July, up from an upwardly revised 0.4% in June, but matching analyst expectations. The PCE price index rose 0.2% month-on-month in July, down from 0.3% in June, but matching expectations. The PCE price index rose 2.6% year-on-year in July, matching the June level, and matching analyst expectations. The core PCE price index that excludes the more volatile food and energy sectors rose 0.3% month-on-month in July, matching the previous month’s pace, and matching expectations. The core PCE price index rose 2.9% year-on-year in July, up from 2.8% in June, but again matching expectations. The bottom line from the above data is that we saw very solid growth in personal income and consumer spending in July. The data showed some modest inflationary pressures from the tariffs, but overall inflation saw very little change. That is seen by Wall Street as more clearance for the Federal Reserve to cut its benchmark interest rate in a few weeks.

This is a big weekend for China. President Xi Jinping will host various world leaders to a high-profile event celebrating victory over the Japan in World War II. The schedule starts with diplomatic meetings on Saturday, before culminating with a big military parade this coming Wednesday in which China will put its full military assets on display. It should be noted that India’s Prime Minister Modi and Russian President Putin are scheduled to be in attendance, with the three of them expected to meet to discuss a united response to President Trump’s sanctions intended to force Russia to end its war against Ukraine.

President Trump announced widespread reciprocal tariffs against the nations of the world on April 2^nd, sending us into an era of uncertainty. Trump’s goal appeared to be one of establishing a baseline tariff on all trading partners that would create revenue for the Treasury Department for helping to balance our fiscal budget, while also using the tariffs to negotiate down higher tariffs and non-tariff barriers currently in place by other countries against the United States. One of the objectives of the Trump Administration since the start has also been to “contain China.” Many of the trade deals reached in recent months contained language intended to limit China’s ability to bypass sanctions – and to particularly limit its ability to pass goods through other countries to bypass U.S. sanctions and tariffs as it seeks to access the U.S. consumer. That was particularly expected to be the case for other Southeast Asian nations, as well as for Canada and Mexico. Wire service reports are now indicating that Mexico is moving a proposal through its Congress for approval that would raise tariffs on multiple Chinese goods, including cars, textiles, plastics and other goods. The proposal is designed to close a loophole that allows China to transship goods through Mexico to the United States, impacting more than $5 billion of Chinese exports annually. If approved, this should help to pave the way for a trade deal between the United States and Mexico. Mexico’s Congress is expected to vote on the proposal in September, as part of its budget plan.

We’ll turn the calendar to September over the three-day holiday weekend. USDA will be spreading across the country sampling fields to determine its September yield estimates, while also sending surveys to farmers as part of the yield-determining process as well. The market is convinced that we’ve seen the highest yield estimate of the year for corn, and possibly for soybeans as well. That’s been priced into the market already. The question now is, how far will yields pull back from the high levels reported as of August 1? Farmers from across the Midwest attended the Farm Progress Show in Decatur, Illinois this week, where I had the opportunity to visit with many of them. The sense was that we’ve pulled back from a phenomenal crop to “just” a big crop. However much yields pull back, this year’s crops are still expected to be big. Storage will be a problem for the cash market to work through, especially in the western Midwest in the absence of a rail bid to ship soybeans to the Pacific Northwest for shipment to China. Futures traders are moving past the crop size debate to focusing on demand. Fund managers believe that farmers will be forced to sell bushels at harvest that will let them out of their speculative short positions. Corn export demand remains strong, while soybean export demand continues to falter in the absence of Chinese buying. Biofuel demand should be good for soybeans, but not enough to offset lost Chinese business if China remains absent.

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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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