Perspective: Morning Commentary for December 23

By: Arlan Suderman, Chief Commodities Economist

Thu, 23 Dec 2021, 14:26

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 23 – Stocks drifted higher once again overnight, ahead of a series of economic reports this morning, while the VIX continued to drift lower as Omicron fears ease on Wall Street. Covid-cases are surging in the United States, but hospitalizations and deaths are not. Furthermore, the FDA approved Pfizer’s at home pill for treatment of Covid, with very promising results for keeping those contracting Covid-19 out of the hospital. That offers the hope that we can truly learn to “live” with Covid, reducing risks to the U.S. economy. The VIX traded just above 18 in early trade today, while the dollar index is trading near 96.3. Yields on 10-year Treasuries are trading near 1.46%. The broader commodity sector saw mixed action overnight. Crude oil prices are trading modestly higher this morning, while the Ags turned lower. The grain and oilseeds saw significant gains in recent days, so some profit taking ahead of the approaching three-day holiday weekend and end of the year can be expected.

First-time claims for unemployment benefits were unchanged at 205K in the week ending December 18, which also met analyst expectations. Yet, that allowed the four-week moving average to rise a bit to 206.25K claims, up from 203.75K the previous week. Continuing claims fell by 8K to 1.859 million, which is a new post-pandemic low, and the lowest since the week ending March 14,2020 when the total was 1.770 million. Overall, this is a good report.

Durable goods orders rose 2.5% month-on-month in November, beating analyst estimates of 1.5% gains. Furthermore, the October data was revised to show 0.1% gains in durable goods orders, which was better than the 0.5% losses originally reported. Durable goods orders minus transportation rose 0.8% month-on-month in November, up from analyst expectations of 0.6%, and up from 0.3% gains the previous month. However, core durable goods orders, that are closely followed by the Fed as an indicator of business expansion, fell by 0.1% month-on-month, falling short of analyst expectations of 0.5% gains, and down from 0.9% gains the previous month.

Personal income rose 0.4% month-on-month in November, down from 0.5% gains the previous month, which had also been the expectation of analysts that we would maintain that pace. Personal consumption expenditures rose by 0.6% month-on-month in November, matching analyst expectations, although down from 1.4% growth the previous months. The PCE price index rose by another 0.6% month-on-month in November, matching analyst expectations, but down slightly from the 0.7% gains seen in October. The PCE price index was up 5.7% year-on-year in November, matching analyst expectations, but up from 5.1% the previous month. The core PCE price index that excludes the more volatile food and energy sectors is closely followed by the Federal Reserve. It rose by 0.5% month-on-month in November, beating analyst expectations of 0.4% growth, but matching the previous month’s pace. The core PCE Price index was up 4.7% year-on-year in November, beating analyst expectations of 4.5%, and up from 4.2% the previous month. In other words, inflation matched or exceeded expectations in November. Inflation remains alive and well, and traders are taking note of that. Of course, today’s data only backed up what they already knew, and what they have been trading.

Gains in the grain and oilseed markets have been impressive in recent days. One can point to various supportive fundamental factors, which indeed are legitimate factors to provide support. Quality milling wheat supplies are tight in the world, and any signs of additional tightening warrant concern. That includes rumors of Ukraine limiting exports in the first half of 2022, although its government denies the rumors. There are also weather risks in the Plains and Pacific Northwest. A dry forecast for southern Brazil and much of Argentina are also legitimate factors of support for corn and soybeans. Yet, all of these supportive stories would be looked at much differently by fund managers if we were in a period of deflation. Instead, the talk would be that we’ve already priced the news of tight wheat stocks into the market, with a big Northern Hemisphere crop coming, and that much of Brazil will see big yields, with crop conditions in Argentina still strong. The fact is, we are in a period of inflation, and Omicron makes the energy sector less attractive as a hedge against inflation in investor portfolios. That draws the attention to the Ags, which include the food-based commodities. That does not mean that prices go straight up, or that there are not times of selling – sometimes significant selling – but it does suggest that the market manages supply and demand at a higher level. That said, it’s now time to go into a three-day holiday weekend, with some traders staying on vacation through the turn of the calendar. That will be followed by index fund rebalancing in the early days of next month. All combined, we could see more erratic trade in the days ahead, with some periods of weakness mixed in.

Grains & Oilseeds
Base Metals
Precious Metals
Digital Assets
Energy
Dairy
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products
Currencies
Interest Rates

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Perspective: Morning Commentary for August 12

August 12 – Today’s focus is on inflation, with the July consumer price index data out this morning. We have this, and one more month of data, ahead of the next Federal Reserve meeting. Of course, headlines from the Middle East and the Black Sea wars also have an ongoing influence on the markets. Stock futures posted gains this morning, while the VIX traded just below 15. The dollar index traded near 99.7. Yields on 10-year Treasuries are trading near 4.66%, while yields on 2-year Treasuries are trading near 4.18%. WTI crude oil is trading near $83, while Brent trades near $88 per barrel. The grain and oilseed markets rebounded from yesterday’s losses ahead of today’s highly anticipated WASDE crop report that is due out at Noon Eastern Time.

Arlan SudermanWed, 12 Aug 2026, 13:33

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

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: Mid-Day Commentary for August 10

August 10 - Stocks traded quietly mixed to weaker through much of the morning as investors weigh Middle East war / peace headlines with artificial intelligence concerns / opportunities. Ironically, the VIX is trading near 15, putting it just barely above 2026 lows, despite the high level of geopolitical risks and AI concerns. The dollar index continues to consolidate largely between 99.5 and 100.0 after the late July break in what appeared to be Japanese central bank currency intervention. Yields on 10-year Treasuries are trading near 4.70%, while yields on 2-year Treasuries are trading near 4.24%. WTI crude oil is trading near $81 at this hour, while Brent trades near $87 per barrel on the geopolitical risks. The grain and oilseed markets are mixed ahead of Wednesday's big USDA WASDE crop report.

Arlan SudermanMon, 10 Aug 2026, 17:02

Grains & Oilseeds

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