Perspective: Morning Commentary for January 5

By: Arlan Suderman, Chief Commodities Economist

Thu, 05 Jan 2023, 14:02

Perspective: Morning Commentary

Guest Commentary by Mike Castle

Market Intelligence - Fertilizer Analyst

January 5 - Stock futures are pointing to a lower open this morning amid further strength in U.S. labor markets that may drive the Fed to remain aggressive for longer than expected. The VIX is looking at a higher start around 22.4 after dipping below the 22 mark yesterday afternoon. The U.S. dollar has recovered all of yesterday's losses, pushing 0.5% higher to trade above 104.5. Treasury yields are up slightly this morning, with 10-year yields hovering above 3.77% while 2-year yields trade just below 4.47%. Crude oil is recovering some of yesterday's losses as well, though the nearby WTI contract is still only trading around $74/barrel, while the ags are mixed amid relatively muted overnight trade.

The U.S. labor market continues to outperform expectations, with this morning's ADP National Employment Report showing private businesses created 235K jobs in December, blowing past forecasts of only 150K and nearly doubling the 127K seen in November. Gains were seen in the service and goods-producing sectors, while declines were seen in trade, transportation, and utilities, natural resources/mining, and financial activities. ADP's Chief Economist Nela Richardson did note that the labor market is "strong but fragmented, with hiring varying sharply by industry." This is further evidenced by more recent rounds of layoffs in the tech sector despite the overall strength, with Salesforce announcing 10% staff cuts yesterday and Amazon following suit by announcing larger layoffs than initially reported.

In other strong labor news, initial jobless claims in the U.S. fell 19K week-on-week to 204K, well below expectations of a slight increase to 225K and representing the lowest weekly level since late September. This brings the four-week moving average down to 213.75K, below the 220.5K seen in the week prior. Continuing jobless claims of 1.694M also fell below market expectations of 1.708M. The continued tightness in U.S. labor markets will likely weigh on markets as it dampens hopes of a less aggressive Fed any time soon, as they know they must inflict some pain on the economy in order to tame wage inflation and win their long-term battle with broader inflationary pressures.

The minutes from the Fed's December meeting were released yesterday afternoon, highlighting the Fed's continued commitment to fighting inflation and raising concern that rates may stay higher for longer than anticipated. Consensus was that the Fed should slow its pace of raising rates, with smaller rate hikes but potentially staying elevated for a longer period of time. Traders have continuously underestimated the Fed's willingness to raise rates this year, being caught off guard by the Fed's hawkish approach time and again and eagerly awaiting a pivot that has yet to be seen and may not being seen at any point in 2023. The drop to a 50 basis point hike in December could be the beginning of a less aggressive approach, but the fight with inflation and the resulting negative impact on the economy are likely to remain in the front of the market's mind to kick off 2023. We'll get some more Fed insight to digest today, with Atlanta Fed President Raphael Bostic due to give a speech later this morning and St. Louis Fed President Jim Bullard giving a speech this afternoon.

European inflation data showed improvement in this morning's release, with the Euro Area PPI falling 0.9% month-month in November, while October was also revised down to show a 3.0% month-on-month decline. Falling energy prices due to an unseasonably warm winter in Europe were the primary driver, beginning to ease fears about the severity of a 2023 European recession. Excluding energy, producer prices rose by 0.1% month-on-month, still an improvement from the 0.5% uptick seen in October. Although this is a slight improvement, Euro Area PPI was still up 27.1% on a year-over-year basis, driving home just how bad Europe's inflation situation has been. This is an improvement from the 30.5% in the month prior and well below the 43.5% peak seen back in August. The sheer magnitude of these numbers make it difficult to be too optimistic, but again, these markets will need to look for silver linings anywhere possible in the current environment.

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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

Grains & Oilseeds

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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Morning Grain Comments 8-7

Morning Grain Market Comments - Matt Zeller

Matt ZellerFri, 07 Aug 2026, 11:56

Grains & Oilseeds

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