Perspective: Morning Commentary for February 23

By: Arlan Suderman, Chief Commodities Economist

Thu, 23 Feb 2023, 14:23

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 23 – Fears are easing a bit on Wall Street this morning following an upbeat outlook from Nvidia in its earnings report, helping traders to set aside for a moment their anxiety about an aggressive Federal Reserve monetary tightening policy. That allowed stock futures to bounce cautiously this morning ahead of additional key economic data released ahead of the open. The VIX pulled back from its seven-week high to trade below 22, while the dollar index traded near 104.6 after posting a nearly seven-week high earlier in the session. Yields on 10-year Treasuries are trading near 3.95%, while yields on 2-year Treasuries are trading near 4.71%. Crude oil prices were trading 1% higher following recent losses, while the grain and oilseed sector was mixed.

Gross domestic product grew at an annualized rate of 2.7% in the fourth quarter of 2022, down from 2.9% the previous quarter and below the initial reading for the fourth quarter of 2.9%. Personal consumption expenditures grew at an annualized rate of 1.4% in the fourth quarter, down from 2.1% growth in the third quarter and below the first reading of 2.0%. This data reflects an economy that is still posting modest growth, but the lower adjustments in the numbers show that the Fed’s monetary tightening is at least having some impact on slowing the pace of growth.

The Chicago Fed national activity index is a weighted average of 85 existing monthly indicators of economic activity constructed to have an average value of zero when the economy is growing at a trend rate, with a standard deviation of one. The index for January was 0.23, up from a negative 0.46 the previous month. That puts the three-month moving average at a minus 0.26, which is an improvement from minus 0.34 the previous month. The bottom line here is that the economy was growing at a below trend rate in the fourth quarter of 2022, but January saw it strengthen to a growth rate slightly above-trend, which suggests that the Fed should hold the line on its monetary tightening policy and not let up.

First-time claims for unemployment benefits fell to just 192K in the week ending February 18, down from 195K the previous week, and below analyst expectations of 200K claims. Even so, the four-week moving average still increased to 191.25K claims, up from 189.75K the previous week. Continuing claims for the week ending February 11 fell 37K to 1.654 million. That’s a significant drop, keeping the total at a historically low level. These numbers suggest that the job market remains quite tight, with wage inflation still a very real problem. That too argues for the Federal Reserve to sustain its monetary tightening policy.

The minutes of the latest Federal Open Market Committee were released Wednesday afternoon, providing insight into the thinking of committee members, while providing something for both the hawks and the doves in the market. The decision to raise the Fed’s benchmark rate by 25 basis points on February 1^st was unanimous, but several members preferred a 50-basis point rate hike. A number of policymakers worried that an “insufficiently restrictive” policy stance could “halt recent progress in moderating inflationary pressures” and keep inflation a problem for a longer time period. Policymakers felt that they would need to stay the course for “some time.” The minutes indicate that members expect to raise their benchmark interest rate a “couple more” times this year. However, a slew of hotter-than-expected economic reports were released after the February 1^st Fed meeting, raising the risk that Fed members may rethink whether they are hawkish enough, including the robust jobs report released two days later. There was no indication that the Fed had any intentions of beginning rate cuts by the end of the year, as previously assumed by the market, and recent data would certainly support the “higher and longer” rate stance.

The primary numbers that matter out of this week’s USDA Outlook Forum are its yield estimates for the coming year. The primary reason that those numbers matter is that it gives us insight into the yields that USDA will likely use in its May WASDE report for its 2023-24 marketing year balance sheet, and that’s what will be traded at the time, whether they are justifiable or not. USDA pegged the 2023 corn yield at 181.5 bushels per acre, while putting the soybean yield at 52.0 bushels per acre – both of which would be record high and above a 30-year straight-line trend yield. Other than those numbers, most everything else will likely change ahead of those first official balance sheets for the new marketing year. The acreage estimates will get a lot of coverage, but they are not based on any surveys of producer intentions. The acreage that matters, and that will be included in the May WASDE report, will be the results of a producer survey on planting intentions conducted on March 1^st and reported on March 31^st.

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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

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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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