Perspective: Morning Commentary for February 21

By: Arlan Suderman, Chief Commodities Economist

Tue, 21 Feb 2023, 14:46

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 21 – Stock futures are under pressure following a three-day holiday weekend, suggesting that we could see the markets reverse Friday’s late rally after both Walmart and Home Depot forecasts disappoint, and amid rising geopolitical risks. The VIX is trading near 22 this morning, showing modestly elevated fear levels on Wall Street. The dollar index is trading near 104.1, as it firms with Treasury yields again today. Yields on 10-year Treasuries are trading near 3.90%, while yields on 2-year Treasuries are trading near 4.69%, with the Federal Reserve scheduled to release the minutes of its latest meeting tomorrow afternoon. We’ll also get more inflation data released on Friday. Crude oil prices are modestly higher this morning, while grain and oilseed prices are mostly higher as well.

Wang Yi, China’s foreign affairs leader, will visit Russia this week. His visit there comes on the heels of President Biden’s surprise visit to Ukraine on Monday, at which time he committed to stand with Ukraine through its fight with Russia. Wang Yi’s visit to Russia also comes following a tour through parts of Europe where he met with officials from France, Italy, and Hungary, in addition to meeting with Ukraine’s foreign minister. It is widely expected that he will communicate the views of European leaders regarding the Ukraine war to Russia, while also seeking to strengthen China’s relations with Russia. His visit to Russia is expected to pave the way for higher level communications between the two countries.

This coincides with a 4,000-word article published by China’s Xinhua News Agency, the official mouthpiece of the Chinese Communist Party, on Monday. The article titled, “U.S. Hegemony and Its Perils” provided a rate and significant hit-piece on U.S. behaviors on the world stage in the political, military, economic, technology and cultural sectors. Publishing this article at this time has significant implications. China does nothing by accident. Rather than seeking to heal tense relations with the United States following the balloon incident, this article directly confronts America, raising those tensions to a new all-time high. Publishing this article was certainly expected to send a message to Washington. But it was also meant to send a message to the people of China. The article builds the case before the people of China that the United States cannot be trusted and that it has evil intentions in what it does. In a way, the article is China’s way of preparing the people of China for a possible direct conflict with the United States, justifying any steps that it takes to challenge and/or confront America. That’s a very significant step in light of how the United States has been militarily challenging China’s claim to the South China Sea, while also challenging its claims to Taiwan.

Rising tensions with the United States also set the stage for accelerating efforts to move toward greater independence from the U.S. for necessary commodities. That becomes easier when Brazil increases its output by an estimated 27 million metric tons of soybeans this year, although a portion of that will offset losses in Argentina. But China is aggressively moving toward reducing its need for imports as well. It raised the subsidies for planting soybeans, while speeding up adoption of GMO seed use for domestic production of both corn and soybeans. Chinese corn yields are roughly 40% below U.S. yields, largely due to their failure to adopt GMO technology. That is changing now, although it will take time to get millions of farmers to fully utilize the new technology. Even so, rising tensions with the United States means that it will increasingly move toward only buying U.S. commodities when necessary. That will shift some other customers our way, but it also emphasizes the need for the U.S. commodity sector to find other customers / uses for its commodities – both domestically and overseas.

Social media lit up with pictures of frost in Argentina over the weekend. A frost event did in fact occur, although it’s still uncertain how much additional production was lost due to the frost versus the ongoing drought, which is intensifying again over the next couple of weeks. A look at Saturday morning’s low temperatures found that readings dipped to 0° C. or 32°F in some isolated areas, with most areas few degrees above that. We likely saw some significant cosmetic damage from the light frost, with more significant yield loss likely more isolated, but we continue to work with our boots on the ground in Argentina to assess the situation. The northern coast of Sao Paulo Brazil had very heavy rains over the weekend, with some cities declaring a state of calamity. The port of Santos stopped navigation at 3:30 p.m. on Saturday, but reopened things by 10 a.m. the next morning. Some landslides were also reported to block roads, but navigation and road traffic to the port is still said to be normal overall. USDA’s annual Outlook Forum kicks off on Thursday and Friday of this week, which will bring some attention to U.S. fundamentals.

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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

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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

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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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