Perspective: Morning Commentary for March 25

By: Arlan Suderman, Chief Commodities Economist

Fri, 25 Mar 2022, 13:33

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

March 25 – We’ve reached another weekend in the Ukraine crisis, with traders assessing their positions going into the period in which the headlines will continue to flow, while the markets are closed. There’s a quiet acknowledgement that the conflict is likely to continue for some time, contributing toward long-term inflation, but not necessarily pulling the U.S. economy into a recession this year. Yet, it will likely contribute to ongoing shortages that will hinder growth while putting greater emphasis on food and energy production. The VIX is lingering near its six-week low below 22 first set on Thursday, reflecting the easing of economic worries on Wall Street. The dollar index is trading near 98.7, while yields on 10-year Treasuries are trading at new 34-month highs near 2.41%. Crude oil prices pulled back better than 2% in a consolidation mode this morning, while the Ags traded mixed to mostly higher – firming early this morning with the increased emphasis on food production.

The war in Ukraine lingers on, but there are encouraging signs for Ukraine. Russian troops have been on the doorstep of the capital city of Kyiv for weeks, but they have been unable to capture this prize city. In fact, we now hear unconfirmed reports that Ukrainian troops have recaptured some villages near Kyiv, with Russian troops falling back due to overextended supply lines. Nonetheless, Russia continues to bombard cities from the air, reportedly targeting many civilian areas with a scorched-earth mentality. Reporters are imbedded in some of these cities, providing video of the carnage to the West, which continues to generate public opinion for supporting the Ukrainian effort. One thing is clear – this will not be over tomorrow short of a surprise development.

Russian President Putin’s pride is at stake. He doesn’t like to lose, and he has no intention of losing. From his standpoint, he needs to come out of this with some sort of victory. It’s that belief that has many in the West, as well as in Ukraine, fearing that Putin might become more dangerous in the weeks ahead. It was certainly a topic of conversation at the NATO meeting this week, where leaders drew a red line regarding chemical weapon use. From a commodity standpoint. We have to assume at this point that the war will linger on. Each passing week does more destruction to the nation’s resources and infrastructure, making the seeding, production, harvest, and export of significant quantities of commodities less likely. The Ukrainian people have an impressive “can do” attitude, but their first priority will be the production of food for their own means, and even that may prove challenging in many areas. That will put less emphasis on corn, and more on the cereals. Local sources currently suggest that 50% of the arable land could be planted this year, and that may be optimistic. Regardless, we should not expect high yields overall, with crop inputs limited. Prospects will be best in western areas of the country, while the prime farmland is in central and eastern areas. USDA is expected to release its first estimates for Ukraine production and exports in its WASDE crop report on May 12^th. Even there, I expect USDA to give Ukraine some benefit of the doubt, and that’s probably appropriate at this point, but it may be the most optimistic numbers we see over the coming year.

Inflation is an even greater concern amid the Ukrainian war. Russia’s invasion of Ukraine did not create the inflation story, but it certainly put more fuel on the fire. This week’s commitment to send more U.S. Liquified Natural Gas to Europe, as we should, will simply add even more fuel to the inflation fire. The United States committed to trying to provide 15 billion cubic meters of LNG to the European Union yet this year to help it wean itself off of Russian energy supplies. That doesn’t necessarily mean that we’ll increase current exports by that amount, but we will likely see some redirecting of existing exports while more infrastructure is built to facilitate larger exports. Keep in mind that Europe imported 155 bcm from Russia in 2021, so this won’t solve the problem, but they will help.

Regardless, this will again contribute to higher prices. That said, expectations for Fed rate hikes are ratcheting higher, with more calls for the central bank to get more aggressive to put a stop to inflation momentum. Fed fund futures trading is now pricing in 68% odds of a 50-basis-point rate hike on May 4^th, while calling for the central banks benchmark rate to rise to 2.25 – 2.50% by its December meeting, with a rising number of analysts looking for even higher rates. The 5-Year Breakeven inflation rate pushed to 3.57% this week, which is the market’s expectations of where inflation will be in the years ahead. There’s a solid correlation between market expectations for inflation, and commodity prices, as more money flows into the sector as a hedge against that inflation. In this case, the commodities also have a story that adds to their attraction to fund managers. Near-term the focus will shift to Thursday’s USDA quarterly grain stocks and planting intentions reports.

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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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Perspective: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

Grains & Oilseeds

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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