Perspective: Morning Commentary for February 16

By: Arlan Suderman, Chief Commodities Economist

Thu, 16 Feb 2023, 14:38

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 16 – Stock futures were under modest pressure overnight ahead of this morning’s inflation data release as Wall Street remains on edge. Stock futures added to their losses on the data release, which created an even stronger argument for hawkish monetary policy. Yet, the VIX continues to trade near 19, indicating a lack of any real panic on Wall Street. The dollar index is trading near 104.0. Yields on 10-year Treasuries are trading near 3.85%, while yields on 2-year Treasuries are trading near 4.65%. Crude oil prices are modestly higher, as they find value below $80. The grain and oilseed sector was mostly weaker overnight.

Headline inflation at the producer level fell to 6.0% year-on-year in January, down from 6.2% the previous month, but above analyst expectations of 5.5%. Furthermore, the producer price index rose a hot 0.7% month-on-month in January, up from analyst expectations of 0.4% and a reversal of the 0.5% decline seen in December. The core PPI was up 5.4% year-on-year in January, down from 5.5% in December, but much hotter than the 5.0% expected by analysts. Furthermore, the core PPI was up 0.5% month-on-month in January, beating analyst estimates of 0.3%, and much hotter than the 0.1% gains seen in December. That combines with the CPI data out on Tuesday to show that inflation is rearing its head once again. We should get more inflation data before the Federal Reserve meets again next month, but this data raises concerns that the Fed will have to do what it has been saying that it must do, and that is to take rates higher and for longer than the market has anticipated.

First-time claims for unemployment benefits dropped to 194K in the week ending February 11, down from 195K the previous week and down from analyst expectations of 200K. The four-week moving average rose slightly this week to 189.5K claims, up from 189.0K claims the previous week. Continuing claims for the week ending February 4 rose another 16K to 1.696 million. This number is still relatively low from a historical perspective, but it continues to trend higher, giving us one of the few clues out there that tighter monetary policy is starting to work toward easing wage inflation, among the many other signals suggesting that more needs to be done. The Philadelphia Fed manufacturing index for February is -24.3, versus -8.9 the previous month, showing ongoing recession in the manufacturing sector, unlike the improvement seen this week in the New York Fed district. Other data showed that January housing starts fell to an annualized rate of 1.309 million, down from 1.371 million the previous month and below expectations of 1.365 million. Permits for new starts came in at an annualized rate of 1.339 million, up slightly from 1.337 million the previous month, but below expectations of 1.350 million. The above factors limited losses on Wall Street thus far, as they suggest that the Fed does not need to get more aggressive than it currently is in its policy. Even so, the tone remains weaker on expectations that we have more 25-basis-point rate hikes to go.

It’s day #358 in the Ukraine war, and the fighting is perhaps as intense as at any point in the war. Russia launched another attack on Ukraine’s critical infrastructure today, firing at least 36 missiles into the country. Ukraine claims that it shot down 16 of the incoming missiles, but significant damage was still done. Nonetheless, Ukraine states that no additional loss of power resulted from the attack. Tensions are also rising along the Ukraine border with Belarus, which is an ally of Russian President Putin. Belarus’ president states that they will not send troops into Ukraine unless they are attacked, but that sounds a lot like lines we heard from Russia prior to its invasion last year. Russia continues to slow-walk inspections of ships moving toward the Ukrainian ports near Odessa, allowing just 16 ships to arrive at ports as part of the grain initiative last week. Ukraine continues to call for the United Nations to force Russia to cooperate with the inspections. The conflict raises some questions whether the initiative will be extended beyond March 19, although U.N. authorities insist that it will. Regardless, the flow of grain out of Ukraine is slowing.

Grain and oilseed prices are influenced more by recession worries this week than they are individual supply and demand fundamentals. They could still rally in this environment, but they need a stronger story to do so, and that story is lacking currently. Headlines of drought damage in Argentina are growing stale, and harvest pressure is increasing in Brazil, where storage is in short supply for this big crop, pushing bushels onto the market. Brazil’s crop is massive. Rains may be slowing harvest progress, but it is not stopping it. Sufficient bushels are being harvested to keep the flow of soybeans to the ports moving, with ships being loaded. The soymeal market, which is believed to have large speculative ownership, is testing their willingness to hold onto those long positions currently. The bulls are being tested in the soybean complex this week.

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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: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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

Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

Grains & Oilseeds

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