Perspective: Morning Commentary for June 14

By: Arlan Suderman, Chief Commodities Economist

Tue, 14 Jun 2022, 13:47

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

June 14 – Inflation and the Fed are again the focus today. Traders responded positively to this morning’s data on inflation at the producer level, but they remain wary of how the Federal Reserve may respond when it releases its updated monetary policy statement tomorrow afternoon. Yet, stocks continue to bounce this morning following Monday’s collapse, allowing the VIX to ease back from yesterday’s five-week high at 35 to trade near 34. The dollar index is trading near 105.1, after hitting a fresh 19-year high near 105.3 on Monday. Yields on 10-year Treasuries are trading near 3.34%, down from yesterday’s 11-year high of 3.44%. Crude oil prices are 1% higher this morning, while the Ags were mixed overnight.

The producer price index rose 0.8% month-on-month in May, matching analyst expectations, but up from 0.4% the previous month. The PPI rose 10.8% year-on-year in May, down from analyst expectations of 11.0%, but part of that was due to a large upward revision of the April number to 11.5%, up from 11.0% originally. The core PPI that excludes the more volatile food and energy sectors rose 0.7% month-on-month, exceeding analyst expectations of 0.6%, even as the April number was raised from 0.4% to 1.1%. The core PPI was up 9.7% year-on-year in May, which was a full point above analyst expectations of 8.7%. The April number was revised to 10.0% year-on-year, up from the 8.8% originally reported. Those were unusually large upward revisions for April, but yet the May numbers still posted strong gains against those April numbers. Yet, because the April numbers were revised so high, it gave the appearance that inflation was starting to moderate in May, resulting in a modest positive reaction by Wall Street.

The Federal Reserve starts two days of debate today, and I would certainly love to be able to listen in to that discussion. There is no clear path out of this mess for the Fed. There’s no precedent to follow, and there are many variables outside of its control. The Fed told us to be patient for far too long because it had everything under control when that hasn’t been the case at all. It would have been better off acting much sooner to tame inflation, knowing that there were factors out of its control, to reduce the risk of those factors garnering momentum. No, I can’t fault them for not anticipating the Russian invasion of Ukraine, even though I had it on my list of black swan events a year ago. But they should have recognized that as a possibility. Even so, inflation got out of hand long before Putin made his move into Ukraine. Why do I bring this up? Because the lack of a clear path likely will lead to some lively debate within the board room the next two days as the Federal Open Market Committee discusses its next move. Yet, its final printed and verbal statements need to reflect confidence that it has everything under control, which won’t be an easy feat. Failure to do so could lead to more market volatility.

Spring planting is complete in Ukraine, and the spring harvest has begun. The total area of this year’s planted spring crops was reduced by more than 20% due to the war, while the mix of those crops changed as well. Farmers factored in the cost of production in deciding which crops to plant, as well as availability of crop inputs, and the ability to sell those crops on the domestic market, with exports remaining limited. The area planted to corn fell to 4.6 million hectares, down from 5.5 million hectares last year. The area planted to spring wheat rose from 42K hectares last year to 200K hectares this year. Soybean area remained essentially unchanged at 1.25 million hectares, down slightly from 1.3 million hectares in 2021. Sunflowers were planted on 4.7 million hectares, which is roughly the same as the previous year. Ukraine expects to harvest 48 – 50 million metric tons of grain this year, with wheat reaching 18 – 20 mmt, soybeans 2.5 – 2.8 mmt, sunflowers 10 mmt, barley 5 mmt, and corn 24 mmt. However, exports are expected to remain constricted. Significant efforts have been made to increase the capacity of Ukraine to export grain over land across its western border. But it has thus far been unable to push exports much over 1.1 mmt per month. That number is expected to drop over the next several months as Eastern Europe prioritizes its own harvest for its infrastructure, leaving less room to move Ukraine exports. Someday that build up of Ukrainian supplies will hit the world market, but that someday unfortunately currently looks a long way down the road.

It’s heating up and drying out across the Midwest this week. A surge of heat is expected to bring record readings this week, before moderating over the weekend, followed by another surge in heat next week. For most, the heat units will be positive for the crops, until the moisture runs out. The primary question is, will the current pattern hold into and through next month? Forecast models disagree on that currently, but for now, the pattern is hot and dry. That has traders nervous in a year when the margin for error is essentially nonexistent.

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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

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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