Perspective: Morning Commentary for March 31

By: Arlan Suderman, Chief Commodities Economist

Thu, 31 Mar 2022, 13:19

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

March 31 – It is the end of a wild month and fiscal quarter on Wall Street, with a healthy dose of economic data and other news to contribute to what could be an interesting finish to the quarter. The VIX is trading quietly near 20 this morning following the release of today’s economic data, while the dollar index is trading near 98.1, after falling to a four-week low below 97.7 yesterday. Yields on 10-year Treasuries are trading near 2.33%, after hitting a 34-month high near 2.56% on Monday. Crude oil prices are down by nearly 5% this morning on President Biden’s plan to release up to 1 million barrels per day from the Strategic Petroleum Reserve, which is starting to dwindle in size. The Ags had a firmer tone to them this morning ahead of the highly anticipated Noon EDT USDA quarterly grain stocks and planting intentions report releases.

Personal income rose 0.5% month-on-month in February, after being flat in January. Today’s number matched analyst expectations. Personal consumption expenditures rose by just 0.2% month-on-month in February, down from 2.1% growth in January and below analyst expectations of 0.5%. In other words, personal income showed healthy growth in February, but the consumer started to pull back on spending amid rising concerns about inflation and geopolitical risks. Even so, inflation continued to rise in February. The PCE price index rose 0.6% month-on-month in February, matching the previous month’s gains, and matching analyst expectations. The PCE price index rose 6.4% year-on-year in February, up from 6.1% in January, matching the average analyst expectation, but a new 39-year high. The core PCE price index is what the Federal Reserve pays particular attention to in its economic assessment. The core PCE price index, which excludes the more volatile food and energy sectors, rose 0.4% month-on-month in February, down from 0.5% in January, but matching analyst expectations. The core PCE price index rose 5.4% year-on-year in February, up from 5.2% in January, but down slightly from analyst expectations that it would come in at 5.5% growth. The 5-year breakeven inflation rate, which is the market’s assessment of what inflation will be over the next five years peaked at 3.59% on Friday, but then it fell to 3.40% yesterday.

First-time claims for unemployment benefits rose to 202K in the week ending March 26^th, up from 188K the previous week, and above the average analyst expectation of 195K. This puts the four-week moving average at 208.5K claims, down from 212K the previous week and a historically low number. Continuing claims of those unable to find a job of an extended period of time fell another 35K to 1.307 million, which is its lowest level since December 1969 when it was at 1.304 million. In other words, the labor market remains quite tight, with more than 11 million open job postings that need to be filled from a very small pool of workers seeking a job. Today’s Challenger job cut report indicated that this month’s announced planned corporate layoffs total 21,387, up from 15,245 the previous month, but still a relatively low number. This report doesn’t distinguish whether the reductions will occur via actual layoffs, or through attrition.

China reported 1,803 new locally transmitted Covid cases yesterday, including 1,340 in Jilin province, with 335 in Shanghai and 20 other regions. The number of new domestically transmitted asymptomatic cases totaled 6,651, including 5,298 of them in Shanghai and 835 in Jilin. The economic impact is currently greater than the initial outbreak in Wuhan in 2020, because this round of infections has hit the financial hubs of Shanghai, Hong Kong, and Shenzhen. Shanghai just announced a “full jurisdiction static control” – they refuse to call it a full lockdown, but it essentially is. The original intention was to shutdown the east side of the city from Monday to Friday morning for testing, followed by the west side of the city from Friday morning until Tuesday. But the case numbers rose so high that authorities are now closing down the city for all practical purposes, with the chances for a quick reopening quickly evaporating. This will exasperate the economic impact for China, while reducing demand for energy and meat, along with a few other commodities. China’s economy is essentially beginning to contract.

Today’s focus in the Ags is on two reports from USDA – its quarterly grain stocks and planting intentions report. Here’s the bottom line. The South American drought removed roughly 35 million metric tons of soybean production from the global balance sheet, necessitating that the United States plant at least 89 million acres with trend yields in the year ahead, assuming some softness in Chinese demand. The Ukraine war removes more than 20 mmt of corn from the global balance sheet by itself, with South American production still an unknown. As such, the United States needs to plant at least 92 million acres of corn, and hope for normal yields.

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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Renewable Fuels
Cocoa
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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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Energy
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Cocoa
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Cotton
Sugar
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Forest Products

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

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