Perspective: Morning Commentary for February 7

By: Arlan Suderman, Chief Commodities Economist

Mon, 07 Feb 2022, 14:24

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 7 – Positive money flow that lifted both stocks and the commodities characterized Wall Street to start the week, with the exception of crude oil, which came under pressure on rumors that the Iranian nuclear talks are nearing the finish line with a possible lifting of sanctions against Iran. The VIX is trading near 24 this morning as Wall Street assesses risk factors for the week. The dollar index is trading near 95.5, as yields on 10-year Treasuries trade near 1.92%, which is just below Friday’s two-year highs. Crude oil prices are modestly lower, while the Ags traded notably higher this morning on lingering weather and geopolitical risks.

The Centers for Disease Control report that the seven-day moving average for positive Covid-19 tests fell to 313K on Friday. That would have been considered a huge number a few months ago, as it would have been well above the previous record just above 162K set in September. However, perspective changes when you’ve gone through the Omicron numbers of recent weeks. Friday’s seven-day moving average was down by nearly a half million positive tests per day from the peak set on January 15^th. People are going back to work, and the economy is showing signs of recovering from the challenges presented by Covid as the Omicron variant raced through the U.S. population in December and January.

China reported 45 new locally transmitted Covid cases to start the week, including 37 in a new outbreak in Baise city in the southwestern part of the country bordering Vietnam. As a result, this city of 3.6 million people entered lockdown mode, implementing “no entry and exit” measures throughout the region. Highways and airports are temporarily closed, and private vehicles are suspended for cross-regional traffic. Baise City adopted home isolation control measures for its citizens that close down virtually everything except supermarkets, farmers markets, hospitals, and pharmacies. It’s part of China’s zero-tolerance policy toward Covid-19 designed to quicky stamp out any flare-ups that occur in the country. The result is that its healthcare system is not overwhelmed, but its economy is struggling, necessitating stimulus measures from China’s central bank at a time when other major central banks are moving toward tightening.

The U.S. State Department continues to warn that a Russian invasion into Ukraine is imminent, and that Russian troops could enter Kiev within three days of the start of the invasion. Meanwhile, French President Macron says that a deal to avoid a full-scale war in Ukraine is within reach. We’ve reached the date when Russia’s military exercise within Belarus that was used as an excuse to gather troops and military equipment there is scheduled to end. Russia’s Military Day is February 23^rd. Nobody knows the intent of Russian President Putin, but many observers suggest that “if” he wants to invade Ukraine, it will likely be between now and February 23^rd. Putin’s ideal scenario would be if he would get considerable concessions from the West combined with installing a puppet regime in Kiev without ever firing a shot.

Forecast maps trended drier for Argentina over the weekend, providing more fodder for the bulls who are buying the corn and soybean markets, on top of the geopolitical risks that supported the corn and wheat markets. This makes the Ags very attractive to fund money rotating out of the equities. I do not know how aggressive USDA will be in lowering production estimates for Brazil, Paraguay, Uruguay, and Argentina in Wednesday’s WASDE report. But in the end, what matters is whether the combines verify yields that are above or below private production estimates coming out of these countries. Brazil’s crop is largely set. The combines just have not yet moved into southern dry production areas to confirm production estimates for this drought-stricken area. Paraguay, which exports much of its production to Argentina to be crushed may end up with less than half a crop. I’m reluctant to get too aggressive in cutting Argentina’s crop size, where it’s the equivalent of the end of July in the Midwest growing season currently in Argentina. In other words, there’s still a lot of time for the crop to recover if the weather cooperates. That’s the key question. Currently, we’re looking at risks that total South American soybean production may drop by 30 million metric tons or 1.1 billion bushels. Brazil export bids are above U.S. Gulf bids from May on currently, and U.S. April bids are competitive as Brazilian farmers refuse to sell. China is not waiting for USDA to confirm a small crop. It’s started hedging its bets by making large purchases under the “unknown destinations” classification, or at least that’s what’s being presumed. Unknown destinations purchased another 18.6 million bushels of U.S. soybeans over the weekend, with 9.1 million being old-crop, on top of 9.3 million bushels of old-crop purchased on Friday.

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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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