Perspective: Morning Commentary for January 3

By: Arlan Suderman, Chief Commodities Economist

Mon, 03 Jan 2022, 14:33

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

January 3 – Happy New Year! Wall Street rolled into the New Year on an upbeat note, with stock futures pointing higher to start the new trading year on expectations that Omicron will roll through quickly, without doing significant long-term damage to the economy. The VIX continues to trade at a relatively low 17 value, reflecting the comfort level of traders on Wall Street as optimism grows again. The dollar index starts the new trading year with a weaker bias, trading near 96.0 at this hour, even though yields on 10-year Treasuries are trending higher, trading near 1.59%. Crude oil prices are modestly lower as airline cancelations soar to start the new trading year, while the Ags enjoyed strong positive money flow overnight. The question now is, can they hold that strength in the day session?

FlightAware reports 1,936 flight cancellations within the United States already this morning, along with another 1,371 delays. While weather is always a contributor to some degree, the bulk of the delays and cancellations are due to crews calling in sick, largely due to the Omicron variant of Covid-19 that is speeding through the population. The latest data available from the Centers for Disease Control this morning is from last Wednesday, December 29, likely due to the holidays. It showed daily positive tests rapidly rising toward a half million per day, not counting the unreported positive at-home tests. Yet, the trend for hospitalizations and deaths related to Covid remained relatively flat, with that trend currently expected to continue. The biggest impediment to economic activity currently is the confusion emerging from the CDC over testing and quarantine requirements. Yet, the economy continues to roll, with the Omicron variant expected to sweep through the population in record time in the weeks ahead. Omicron remains one of the primary stories to follow as we start 2022, but thus far it looks like a short-term obstacle.

Inflation remains another one of the key stories to follow in 2022. The latest data showed inflation at 39-year highs, and still rising. That doesn’t mean that we’re going to repeat the high levels seen four decades ago, but it does warrant watching. We’ll get an updated jobs report on Friday, which will include data on wage inflation. The Fed is scheduled to complete tapering in March. That doesn’t mean that it will be done with stimulus, but rather that it is done for now with adding to the stimulus. It still hasn’t dealt with the question of removing stimulus. Interest rate hikes are expected to start – possibly as early as the Fed’s March meeting. The Ag commodities look to remain on the radar of fund managers as a potential tool for hedging against inflation as long as inflation remains a concern and as long as the Ags have a semblance of a fundamental story. Energy could retake the lead role as a tool for hedging against inflation once we get past the Omicron variant.

Rising meat prices are also a significant contributor to inflation, making them a target of the Biden Administration, which announced a $1 billion plan to combat high meat prices this morning. The Biden Administration is placing the blame for high meat prices on a few processing companies it claims are running up prices, although it failed to mention supply and demand factors in play. Nonetheless, look for more policies targeting these companies, while the Administration designates $375 million in grants for independent meat producers, with another $275 million in additional financing. It is also putting aside $100 million to address the increase in meat inspectors needed at these new independent plants, along with $100 million to train workers.

High fertilizer and other crop input costs will remain a significant story impacting the commodity markets this year. It’s one of the factors that is expected to keep the grain and oilseeds attractive to fund managers looking for commodities to use as a hedge against inflation. That should combine with the emerging new generation of renewable fuels to generate interest in the edible oils as well. That doesn’t mean that we can’t have times of significant selloffs in these markets, but we could see the markets manage supply and demand at a higher level than would otherwise be expected, which is what we’ve already been seeing in recent months.

Finally, geopolitical risks are expected to increase in 2022. The current most pressing risk would appear to be the risk of Russia moving into Ukraine with a major military strike. The shutdown of trade from this region would be expected to create significant supply risks for corn and wheat if it were to occur. The next area to watch would be China’s promised reunification of Taiwan. China wants to do this without a significant military conflict. Yet, if it makes a move, it could result in trade sanctions that could hurt the flow of corn, soybeans, and wheat to the world’s largest importer. Am I predicting these moves? No, but I’m warning of their potential impacts if they occur in 2022.

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Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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Perspective: Morning Commentary for August 5

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

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Perspective: Mid-Day Commentary for August 4

August 4 – The Dow Jones is absolutely piling on gains today, adding a similar number that led to yesterday’s record, with the benchmark index now nearing the 54k-point mark through mid-morning. The S&P also hit a new record, while the NASDAQ is exceeding both those gains on a percentage basis. The marketplace is optimistic on a U.S.-Iran trade deal, though the proposed resolution is still being “circulated between the parties”.

Mike CastleTue, 04 Aug 2026, 14:58

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