Perspective: Morning Commentary for May 2

By: Arlan Suderman, Chief Commodities Economist

Tue, 02 May 2023, 13:56

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 2 – Stock futures had a softer tone to them overnight, as traders note the beginning of two days of policy meetings by the Federal Open Market Committee. Yet, the VIX continues to trade below 17 this morning, or just above yesterday’s 18-month low. The dollar index is trading near 102.3, or near this morning’s three-week highs. Yields on 10-year Treasuries are trading near 3.53%, while yields on 2-year Treasuries are trading near 4.12%. Crude oil prices are modestly weaker this morning as traders mark time ahead of tomorrow’s Fed statement, while the grain and oilseed markets are mixed, continuing with Monday’s trends of higher soybean and weaker corn and wheat prices.

First Republic Bank fell into the hands of the Federal Deposit Insurance Corporation over the weekend, before it was quickly purchased in an auction by JPMorgan. I didn’t devote space to it yesterday because it wasn’t a story – it didn’t have much of an impact on the markets. But that really was the story. The third regional bank of about 30 of similar size failed over the weekend, and no panic ensued on Wall Street. JPMorgan CEO Jamie Dimon said all the right things – how this now puts the bulk of this banking crisis behind us – but you wouldn’t expect him to say anything else. There very well may be more failures, and many depositors remain nervous. Yet, Wall Street’s reaction suggests that we’ve moved away from the “fearing the worst” mentality to currently anticipating the best, or at least something close to that. The VIX – Wall Street’s fear index – is trading near 18-month lows, and a major bank failure does little to change that. Emotions can pivot quickly on Wall Street, but for now we must take note that the VIX set those 18-month lows on the first trading day after First Republic’s failure, and just ahead of what is expected to be another rate hike from the Federal Reserve.

The markets are future oriented. They trade future expectations. Both the Nasdaq and the S&P 500 stock indices are trading just below their February highs, and you must go all the way back to August to find higher values. They’re doing so despite 95% odds this morning that the Fed will hike its benchmark interest rate another 25 basis points tomorrow because traders are already looking ahead to the anticipated pause to follow the rate hike, and the anticipated rate cuts to come after that by the end of the year. These dynamics could change if the Fed comes out with more hawkish language than traders anticipate tomorrow, while they could also change if the language was more dovish than expected. The risk though is on the side of the Fed being more hawkish, as Fed members continue to emphasize that they do not want to repeat the mistake it made in 1980 when it pivoted too soon.

Geopolitical risks continue to increase, with the weekend seizure of a U.S. bound oil tanker by Iranian forces. This occurred after the United States seized a tanker of Iranian oil destined for China. This comes as “experts” warn that the risk of an unintended war with China continue to rise. Encounters between U.S. and Chinese aircraft and warships continue to rise in the Taiwan Strait and across portions of the disputed South China Sea. These are largely seen as international waters that the United States is trying to keep as such by regularly passing through them. Meanwhile, China is claiming these territories, while taking steps to intimidate Taiwan and other surrounding nations. The rising tensions are so great that Japan is doubling its military defense budget, while South Korea is strengthening its defense forces as well due to the growing threat they see from China. Increased presence of conflicting forces increases the risk of accidental conflict that turns into war.

Ukraine reports that negotiations over the “Grain Deal” will happen tomorrow, with all parties involved, including Russia, the United Nations, Turkey, and Ukraine. Under the framework of the current agreement, no direct talks occur between Russia and Ukraine, but rather they speak through Turkey and the United Nations. Ukraine expects its grain exports in the 2023-24 marketing year to be half of this current year’s shipments due to ongoing problems of shipping through the “safe corridor” and due to rising restrictions for moving grain west through Eastern Europe.

The good and the bad offset one another in the wheat crop over the past week, with a net no-change to the crop’s condition index score, as it remains at 270. Oklahoma and Texas saw some improvement due to rainfall over the past week, while Kansas, and Nebraska saw more notable declines, while Illinois also saw a significant decline due to dry conditions. Further north, we’re already starting to see some South Dakota producers make the switch from oats and spring wheat to corn and soybeans. The big surprise in next week’s May USDA WASDE crop report may be how small the winter wheat crop is, although that will likely be offset by seeing how big the corn and soybean crops may be if the crops continue to see active planting progress. No significant planting delays are seen to this point, and the next couple of weeks look to see significant progress in getting the crops in the ground. Soybeans continue to see strength from solid crush demand amid tight old-crop supplies, but there’s still a lot of Brazilian soybeans yet to hit the cash market, and USDA will likely show notable expansion of stocks for the coming year.

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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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
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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