Perspective: Morning Commentary for December 9

By: Arlan Suderman, Chief Commodities Economist

Fri, 09 Dec 2022, 14:42

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 9 – Stock futures turned notably lower following the release of this morning’s inflation data at the wholesale level as traders feared that it would lead to a more hawkish Federal Reserve. Yet, the VIX continues to trade near 23, where it has hovered for much of the past several days. The dollar index rallied sharply following the data release, but it has since settled back to trade near 104.9. Yields on 10-year Treasuries also rallied to trade near 3.54%, while yields on 2-year Treasuries are trading near 4.33%. Crude oil prices bounced off of yesterday’s 2022 lows to trade 1% higher at this hour. The grain and oilseed markets are quietly mixed ahead of today’s USDA WASDE crop report, scheduled for release at Noon Eastern Time.

The producer price index rose 0.3% month-on-month in November, exceeding analyst estimates of 0.2% growth. Furthermore, the October reading was also revised to 0.3% growth, up from the 0.2% growth originally reported. The headline PPI was up 7.4% year-on-year in November, beating analyst estimates of 7.2, but down from 8.0% the previous month. The core PPI rose 0.4% month-on-month in November, doubling analyst expectations of 0.2% and notably up from the 0.0% seen in October. Core PPI rose 6.2% year-on-year in November, beating analyst estimates of 5.9%, although down from 6.7% the previous month. We should see inflation data at the consumer level for November next week, but today’s data provides further evidence that inflation is not just grounded in food and energy costs, but it’s becoming engrained more deeply into the economy. Energy actually declined 3.3% on the month, which isn’t a trend that we can count on continuing, especially as we see China reopening its economy and many of our shale oil fields seeing developments that will make it more difficult for them to increase production going forward. We could very easily see energy inflation return in 2023 – perhaps in a significant way. Meanwhile, the decline in energy was offset by an increase in final food production costs, in part reflecting higher wage costs. Other gains were seen in the services sector, which is also labor intensive.

China’s President Xi Jinping completed his visit to Saudi Arabia today, where he met with leaders of many of the Arab nations. The meeting resulted in the signing of 34 energy and investment deals that are expected to strengthen the economic ties between China and the Middle East. However, observers noted that very little progress was made in several key objectives of the Chinese state, including changes that would profoundly reshape the global energy landscape and geopolitics. The meetings did not result in Saudi Arabia joining the BRIC nation coalition, nor was there notable progress made in agreeing to replace the U.S. dollar with the Chinese yuan in oil trading. Yet perhaps China was able to take the initial steps in trying to drive a wedge between the United States and Saudi Arabia.

Corn and soybean crops continue to advance toward maturity in Brazil in generally good condition. Areas of crop stress tend to hover between 10 and 20% of the crop growing areas, which is fairly typical for any growing season. The first of the soybeans planted in mid-September in Mato Grosso are expected to be harvested over the next two to three weeks, while more significant acreage will be harvested in January and February. It’s a different story in Argentina, where a multi-year drought remains in place. Argentina hopes to produce half a wheat crop this year, and that may prove optimistic. Wheat harvest will gain momentum over the coming days and weeks. Argentina has a long spring planting season, starting in October, and continuing into early February. One-third of the corn has been planted thus far, with the earliest of the corn now moving into pollination. The three-year average for planting progress is 47%. The crop is rated 18% Good to Excellent currently, versus 85% G/E a year ago. The soybean crop is 37% planted currently, down from the three-year average pace of 58% due to the drought. La Nina remains firmly in place currently, suggesting that we could see at least another four to six weeks of the current weather pattern. I’ve written a lot about how we could see Brazilian soybean production rise by 28 million metric tons this year, while the Argentine crop could see a decline of 16 to 18 mmt IF the current pattern lingers into the new year.

USDA is scheduled to release its WASDE crop report today. Look for it to make another modest cut to Argentina’s soybean crop, and perhaps corn crop in today’s report. Those cuts could become much more significant in January and February. Argentina’s wheat crop will also likely be cut some more, while Australia’s crop gets bigger. U.S. corn exports could be cut, partially offset by an increase in feed usage, while USDA will likely hold the line on most other U.S. balance sheet items – perhaps a modest cut in wheat exports. The bigger report will be in January, when much more significant changes to the domestic and global balance sheets are expected.

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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

Grains & Oilseeds

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