Perspective: Morning Commentary for January 19

By: Arlan Suderman, Chief Commodities Economist

Wed, 19 Jan 2022, 14:25

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

January 19 – Stocks rebounded on positive earnings results overnight following big losses on Tuesday to start the trading week. The overnight gains are only a fraction of Tuesday’s losses, but today’s early buying eased some of the concerns a bit on Wall Street, with the VIX pulling back from yesterday’s high above 23 to trade near 22 this morning. The dollar index also pulled back from yesterday’s high above 95.8 to trade near 95.6 this morning, even though yields on 10-year Treasuries traded above 1.90% for the first time in two years. The buying spread across both the equity and commodity sectors overnight. Crude oil prices pushed above $87 for the first time in more than seven years, while the Ags regained some upward momentum as well.

Housing starts rose to an annualized rate of 1.702 million units in December, up from 1.678 million in November and well above analyst expectations of 1.650 million units. But the news gets better. Permits for future housing starts rose to an annualized rate of 1.873 million in December, up from 1.717 million in November and above analyst estimates of 1.710 million. The data for actual housing completions was mixed. Privately-owned housing completions fell 8.7% month-on-month in December at a seasonally adjusted annualized rate of 1.295 million. However, single-family housing completions in December reached 990K, which is up 3.9% from the previous month. An estimated 1.338 million housing units were completed in calendar year 2021, which was up 4.0% from the previous year’s total.

U.S. covid numbers appear to have peaked over the past week, as we had hoped, although I’ll feel better about it once we get another week or two of data behind us. The Centers for Disease Control’s data is quite volatile, as many sources no longer report numbers to it through the weekend, and the three-day holiday weekend added even more volatility to the numbers. As such, I’m focused on the seven-day moving average for daily reported cases. That number dropped to 701K on Monday, the latest date available from CDC this morning, down from its peak of 796K on January 14^th. However, we need to get all the holiday tests through the system before we can have confidence in this apparent peak, and the daily numbers are still high. Hospitalizations are on the rise due to the sheer size of new cases, with the daily death count is trending higher as well, but neither of the trends are currently high enough to stop the economic engine that continues to push forward in this country.

The message is mixed in China, where “just” 55 new locally transmitted Covid cases were reported yesterday, down from 127 the previous day. That would suggest that China’s zero-tolerance policy is still having some success at keeping the virus under control. However, new cases continue to pop up in regions that were previously clear. China’s dream of hosting the Olympics with the stands filled with fans may have been shattered. Now it’s simply trying to make sure the Olympic Games happen without disruptions due to Covid. Restrictions are numerous. That’s raising economic concerns, leading China to implement a series of stimulative steps to inject money into its economy. It must do so at a time when the U.S. is raising interest rates, attracting more money to this side of the ocean. Its counter-step is to redirect resources to encourage qualified large-scale commercial and logistics companies to “go global” to capture more foreign investment.

Chinese feed demand is expected to be down 10 – 15% year-on-year in the first quarter of this year, according to our sources on the ground in China, reflecting current poor feeding margins. That’s not a good sign for U.S. corn and soybean exports, even though yesterday’s weekly shipment numbers from USDA were both seasonally strong. The soybeans were filling a gap as crushers wait for new-crop South American supplies to arrive. However, U.S. domestic demand remains strong, and is getting stronger, with December NOPA crush at a record high 186.4 million bushels. That should push total crush for December to just below the 200-million-bushel mark as U.S. crush capacity continues to expand with the development of the renewable diesel industry.

Both corn and soybean prices joined this week’s wheat rally overnight. Support was largely two-fold. First, traders realize that, while this week’s rains are good in South America, a lot of risk remains for the rest of the growing season in Argentina, with the February models and analogs leaning dry. Second, tensions between Russia and Ukraine have reached a new high, with U.S. and European officials speaking as if a military conflict is imminent, which could shut down corn and wheat exports from the region, further tightening world supplies.

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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.

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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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