Perspective: Morning Commentary for February 1

By: Arlan Suderman, Chief Commodities Economist

Tue, 01 Feb 2022, 14:38

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 1 – Stock futures were mixed overnight as we open a new calendar month of trade. New money is expected to be available to the markets to start the month, with fund managers discerning the best path to direct its flow. Rapidly declining Covid numbers ease some concerns on Wall Street amid relatively good earnings reports, although inflation, and the Fed’s ability to manage it, will continue to capture the trade’s attention. The VIX is trading at a 12-day low near 24 this morning, reflecting easing worry levels on Wall Street. The dollar index continues to work lower, as it trades near 96.3 this morning. Yields on 10-year Treasuries are trading near 1.78%. Crude oil prices continue to consolidate just below last week’s seven-year highs, while the Ags are mostly higher in early trade today. Many of these commodities continue to be attractive to fund managers as a hedge against inflation, but they also have enough of a fundamental story to justify the interest.

U.S. Covid numbers are rapidly declining. The Centers for Disease Control reports that the seven-day moving average for positive Covid tests fell to 497K on Sunday, down more than 38% over the past two weeks. Both the hospital numbers and the deaths are also showing signs of improvement as Omicron does what viruses do – it’s moving through the population. There are already reports of new variants, which is also typical of viruses. The typical pattern for viruses is to mutate to forms that spread faster and easier, but that also tend to be increasingly less lethal. That’s not always the case, as we saw in the 1918 Spanish Flu, but it is the more typical path for viruses. This is good news for moving past Covid as both a major health threat and a risk to the economy. The primary question now is whether the hit on the economy in December and January was largely due to Omicron, suggesting that we should see a bounce back in February and March, or whether there are other structural issues at hand.

A heated exchange of words occurred Monday between U.S. and Russian ambassadors during a Security Council meeting at the United Nations. The U.S. accused Russia of not giving the answers it hoped for in response to a written document it delivered to Moscow last week outlining possible paths toward diffusing tensions between Russia and Ukraine. A response had been received, the contents of which have not been revealed, but it irritated the United States. However, the Kremlin appears to be shifting course following the heated exchange, saying that there had been a “mix up” in developing the response to the U.S. paper, and that an official response had not yet been issued. Russian President Vladimir Putin is expected to meet today with Hungarian Prime Minister Viktor Orban, after which he may appear before the press to address the tensions.

Hungary is a member of both NATO and of the European Union, but it maintains a close relationship with Putin. However, Hungary admitted recently that it was in discussions with the United States about possibly accepting roughly 1,000 U.S. and allied troops as a show of force to discourage Putin from invading neighboring Ukraine. Meanwhile, Russia continues to move troops to its border with Ukraine, and it is now positioning troops in Belarus, which shares Ukraine’s northern border. In other words, Russia has troops surrounding nearly two-thirds of Ukraine’s borders currently. Russia is also increasing its naval activity in the Mediterranean and in the Atlantic, putting more ships in the sea as a show of force. It’s still unknown whether Russia intends to invade all, part, or none of Ukraine. A valid argument can be made for each of those options. However, it is not expected to initiate an invasion during the Olympics. In fact, one key date being watched is February 23^rd, which is Military Day in Russia. That’s when some observers believe that Putin may make his move if he actually plans to invade.

Corn and wheat traders will remain on edge until they see how this plays out. Money continues to flow into the grains on the risk that Putin may invade Ukraine in a way that might disrupt trade out of the region, which accounts for 29% of the worlds’ wheat trade and more than 16% of the corn trade. Soybeans though remain the leader to the upside, with new contract highs again last night, supported by declining production estimates out of Brazil. Two private production estimates released over the past 24 hours dropped Brazil’s soybean crop below 130 million metric tons. June soybean asking prices at Brazil’s Paranagua port are 20 cents above U.S. Gulf bids this morning, suggesting that the cash market in Brazil is worried about a crop short enough to run out of exportable supplies this summer. China continues to buy a cargo or two a day of U.S. soybeans, although many of those are for delivery in the new marketing year. It all comes down to the final size of the South American crop, with much of that yet to be determined in the weeks ahead.

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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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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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