Perspective: Morning Commentary for August 8

By: Mike Castle, Market Intelligence - Fertilizer Analyst

Fri, 08 Aug 2025, 13:23

August 8 – Expectations of a more dovish Fed are leading stock futures to point to a stronger open following the announcement of President Trump’s nomination of Council of Economic Advisers Chairman Stephen Miran to fill the vacant spot left by former Fed Governor Adriana Kugler’s recent resignation. Fears of more political influence on the Fed have certainly increased nerves on Wall Street amid the ongoing public criticism of current Fed Chair Jerome Powell, with last month’s rare double-dissent on holding rates steady seen as a sign of this pressure creating divisions among members, especially given the end of Powell’s term being in sight. Direct political influence on the Fed is objectively a negative thing, and the market has responded as such at times in recent months—however, this situation has shifted rate cut expectations notably, which is the current focus. It wasn’t long ago that the odds for the first rate cut of 2025 had been pushed back to October, but CME’s FedWatch tool this morning now shows 91.5% odds of a rate cut at next month’s meeting being priced in, as well as additional 25-basis point cuts at the Fed’s October and December meetings.

Meanwhile, Wall Street looks mostly calm to end the week, with the VIX cooling back to the 16.3 level and limited economic data on tap. The dollar is looking to rebound from the losses seen over the last two days, trading above 98.2 to start the day. Treasuries are slightly in the green as well, with 10-year yields at 4.27% and 2-year yields at 3.75%. Crude oil prices are attempting to stem the week’s sharp losses, up ~0.2% at the time of writing to trade just below the $64 level after pushing to a fresh two-month low in recent days. The ags are quietly mixed amid very low trade volume in the overnight session with market focus looking ahead to next week’s fundamental updates from the USDA.

U.S. consumer inflation expectations rose slightly in July according to yesterday’s release from the New York Fed, with year-ahead inflation seen at 3.1% compared to the 3.0% seen in June. Despite the slight uptick, this is still a marked improvement from the spike up to 3.6% seen back in March and April amid the height of U.S. tariff uncertainty and follows the same pattern seen in other similar recent metrics. Interestingly, three-year-ahead inflation expectations stayed flat at 3.0% but five-year-ahead inflation expectations rose the sharpest of all, hitting 2.9% in July versus the 2.6% seen in June.

President Trump and Russian President Putin may meet in person in as little as days to discuss the ongoing war in Ukraine, according to Russian government officials. This follows Special Envoy Steve Witkoff’s trip to Moscow this week—while the details have still not been ironed out at this point, the U.A.E. has been suggested as the most likely meeting site. This would represent the first time a U.S. president has met with Putin in person since Russia’s invasion of Ukraine back in February 2022. Today is also the deadline for the ultimatum President Trump laid out for Putin following his recent ramp-up in threats of tariffs and/or sanctions on Russia if they did not agree to advance peace efforts. He has also suggested the possibility of issuing up to 100% secondary tariffs on nations buying Russian exports; Wednesday’s additional 25% tariff on India was in response to their ongoing large-scale imports of Russian oil.

It's not just crude oil or other energy products that India and other original BRICS members have been buying from Russia, there are major ties in the ag industry as well. Following Russia’s invasion of Ukraine in early 2022, their fertilizer exports to fellow BRICS members (namely India and Brazil) skyrocketed as other buyers stepped away for fear of being caught up in sanctions. As can be seen in the first chart below, the biggest year-over-year jump in Russian urea exports to these nations happened between 2021 and 2022, coinciding with the war’s breakout. However, this situation isn’t unique to the BRICS alliance—our imports of Russian fertilizer have increased substantially during this time as well.

The second chart below shows the steady increase in U.S. urea imports from Russia in recent years, hitting a record high in 2024 and nearing that level already through the first six months of 2025. This makes Trump’s threats of punitive measures that would cut off trade flows from Russia very important to the domestic nitrogen market (Russia is also our top UAN supplier). If the planned meeting between Trump and Putin leads to a cool-down in these threats, expect to see Russian tons flow even heavier into the U.S. given the E.U. tariffs on fertilizer from Russia and Belarus that just went into effect on July 1, pushing more of their supply elsewhere. This flow, coupled with China’s long-awaited easing of fertilizer export restrictions for a short period this summer, could finally allow the urea market to see a correction ahead of the upcoming fall application season, which would be very welcomed by farmers given the poor affordability currently being seen amid rallying fertilizer prices and falling grain prices. Much of the shift to a more bearish sentiment in the urea market in the last few days is also in response to Chinese exporters being allowed to sell limited volumes directly to India—could this be another sign of growing cooperation among original BRICS members amid the ongoing trade tensions with the U.S.?

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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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